- The DCF model estimates XRP’s fair value at $18,036, vastly exceeding its market price of $2.57.
- Speculative trading, regulatory conditions, and adoption levels influence XRP’s price more than theoretical valuation models.
- Some see XRP as undervalued, while others question the assumptions behind the DCF model’s extreme valuation.
The true value of XRP may be much higher than its current market price, according to the discounted cash flow market valuation model. Following the meteoric surge during the 2017/2018 bull run that saw XRP claim a peak above $3.8, XRP had underperformed relative to the broader market for years.
#XRP Fair Value Sits at $18,036, Per Discounted Cash Flow Valuation Model. pic.twitter.com/Q4uVs6NmEw
— TheCryptoBasic (@thecryptobasic) February 18, 2025
A new valuation model estimates XRP’s fair value at $18,036 based on a discounted cash flow analysis. The valuation assessment stands far apart from the current market valuation of its units leading investigators and analysts to question its projected trajectory.
Understanding the DCF Model and Its Application to XRP
The discounted cash flow (DCF) model is a financial method used to determine an asset’s value based on projected future cash flows. It’s also used for calculating a company’s share price, the value of investments and budgeting. Thus, a lower discount rate leads to a higher valuation and vice versa (range: 6%-12%).The DCF model is common in traditional finance but has challenges when applied to crypto assets.
According to this methodology, XRP’s fundamental value is significantly higher than its trading price. The current price of XRP is at $2.57, reflecting a 3.0% decline.The 24-hour trading range indicates a low of $2.55 and a high of $2.72, suggesting moderate volatility within this period.
Examinations regarding market efficiency together with speculative forces and externally created regulatory aspects influence the valuation methods of digital assets. Some investors may interpret the model as an indication of XRP being undervalued, while others may remain skeptical about the assumptions used in the calculation.
Regulatory and Industry Reactions
The XRP evaluation through the DCF model has generated both assessment interest and doubts among members of the cryptocurrency community. Real-world adoption levels and market liquidity should have a bigger impact than DCF models do on asset price changes.
The future condition of XRP depends on market patterns as well as increased digital asset adoption trends. The actual market dynamics control price movements even though evaluation models produce analytic insights.
