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XRP Valuation Framework 2018

Sep 14, 2025

Overview

The video analyzes a 2018 valuation framework for XRP, developed by Robbie Mitchnik (now head of digital assets at BlackRock), outlining high and low price projections for XRP and discussing its potential adoption and market impact.

Background on the Valuation Model and Authors

  • The valuation framework was written by Robbie Mitchnik and Susan Athey in June 2018.
  • Mitchnik worked at Ripple before joining BlackRock, where he became head of digital assets.
  • Susan Athey is a professor at Stanford and serves on Ripple’s board, with disclosed equity interests in Ripple and XRP.
  • The report uses only publicly available information and emphasizes its illustrative, not predictive, nature.

Context of XRP, ETFs, and Market Trends

  • Interest increased due to discussions on potential XRP ETF filings, particularly by BlackRock.
  • Over 25% of the 93 current crypto ETF filings involve XRP holdings or derivatives.
  • XRP adoption through ETFs is expected to drive significant demand and asset appreciation.
  • Comparison made to Ethereum and Bitcoin ETF asset milestones, with XRP projected to achieve rapid growth if adopted.

Key Features and Challenges of Crypto Asset Valuation

  • Traditional financial valuation models are not suitable for crypto assets due to their unique features.
  • The framework considers both economic utility and store-of-value roles for crypto assets like XRP.
  • XRP’s advantages include cross-border payment speed, security, and efficiency.
  • Significant barriers exist due to entrenched banking systems and gradual technology adoption by corporations.

Adoption and Market Penetration Scenarios

  • The "success case" assumes XRP’s widespread adoption for remittances, corporate, and FX payments.
  • Adoption probabilities: 25% chance of success, 75% failure, with various breakdowns for potential failure scenarios.
  • High estimate: XRP handles 10% of daily FX transactions ($528B), 40% of corporate payments, and 75% of retail remittances by 2030.
  • Low estimate: $191B daily transaction volume.

Value Model Parameters and Projections

  • Modeled average XRP holding time ("T") ranges from 0.5 to 10 days, reflecting different banking and corporate usage patterns.
  • Assumes global investable assets of $450T and household wealth of $300T, with crypto assets potentially capturing a share similar to gold (~2%).
  • In the success case, XRP could secure 15–30% of crypto storage demand ($1.6–3.2T).
  • Discount rate applied is a conservative 8.5% to reflect risk and market correlation.

Fundamental Value Estimates for XRP

  • High estimate: $32.91 per XRP unit if the success case is achieved.
  • Low estimate: $6.37 per unit.
  • Probability-weighted fundamental value range: $1.59–$8.23 per unit, given a 25% success probability.
  • At the time of the report, real trading range was $0.49–$3.72 per XRP.

Final Thoughts and Market Implications

  • The valuation model provides a structured, rational explanation for potential XRP price outcomes, not a guarantee.
  • Potential regulatory or legal issues may explain BlackRock’s current silence on XRP.
  • The author anticipates a future XRP ETF filing by BlackRock and ongoing market attention.

Decisions

  • Reference BlackRock’s 2018 valuation model as a robust framework for considering XRP’s potential value.

Action Items

  • TBD – Video Creator: Review updates or future work on the XRP model and provide further analysis in upcoming content.

Full transcript