February 24, 2024

The Athey and Mitchnick fair value calculator has estimated XRP’s value at a trading volume of $50 billion. The calculator estimates that XRP will be worth above $5 when it hits a $50 billion trading volume milestone. 

Why is This Calculation Important?

The Athey and Mitchnick calculator was introduced in 2018 and has garnered commendable recognition. It was created based on a research paper by former Stanford professor Susan Athey and Stanford MBA candidate Robert Mitchnick. 

The research focused on establishing XRP’s actual value because the researchers believe the cryptocurrency is undervalued. So, developers created this calculator that summed up XRP’s potential value if its volume increases massively in the next two years. 

The calculation was done with an estimated daily transaction volume of XRP at $50 billion.

Also, the assumption is that XRP will reach a market cap of $80 billion in two years. These parameters and others led to an estimate of $5.38. But despite the positive estimate, XRP has remained below $1 since December 2021.

Although it ranks as the fifth largest cryptocurrency, it has remained between $0.3 and $0.9 for the last two years.  

The ongoing legal battle between Ripple Labs and the US Security and Exchange Commission (SEC) significantly contributes to the XRP slump. Despite Ripple getting a favorable summary judgment in 2023, the case is still ongoing.

On January 11, the SEC requested the US District Court in New York to issue an order mandating Ripple to produce financial statements from 2022 to 2023. 

According to an XRP analyst Kahneman on X, the SEC wants three things. These are audited financial statements for 2022 and 2033 and all post-complaint contracts for XRP sales.

Also, they want access to the XRP Institutional Sales proceeds received after the complaint. 

Kahneman stated that the SEC claims it is proper to discover these things and attempted to get these records in 2021. However, Ripple filed a response opposing the SEC’s motion, compelling them to release these documents. 

According to Kahneman, Ripple opposed the motion, stating that it is untimely as the discovery of the facts for their case ended months ago. Also, Ripple Labs’ legal team believes such information is irrelevant as it won’t affect potential penalties or court injunctions. 

Additionally, Ripple notes that violating the standard procedure will set a dangerous pattern where people ignore discovery deadlines. Furthermore, it will cause a compromise in fair trial procedures. 

However, while Ripple argues that finances are irrelevant to assessing penalty size, the SEC believes that the courts must consider wealth in making decisions.

According to attorney Bill Morgan, much is at stake with this issue. Unfortunately, the Ripple vs. SEC lawsuit has affected XRP’s price over the years, and a conclusion in Ripple’s favor will aid XRP’s price recovery. 

Such a recovery might enable XRP to hit the price estimates projected by the Fair Value Calculator. 


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