XRP to $100 (571 bagger)? Not Anytime Soon. How I Analyze Cryptocurrencies

Lots of people look at the price of a cryptocurrency judge it's value purely on whether it will hit another price. That's ok but you also have to access if that target price is likely given what is publicly available about the coin.

Lets look at Ripple (XRP). It currently trades around $0.18 and the market cap (MC) is around 7B which represents appox 5% of the total crypto MC. I usually use excel and do a quick assessment (see below)

If your target is $100 then you are expecting a x571 multiple (bagger) and 4T MC. OUCH!

If XRP remains at 5% of total crypto MC then you expect the total crypto MC to hit a whopping 80 Trillion dollars (math check 4/80 = 0.05 or 5%).

130B to 77T is probably not going to happen anytime soon.

Lets look at a more reasonable scenario:

Here i'm guessing that the crypto currency total MC will hit 5T around 2025. 5% of 5T is 250B. If XRP stays around 5% then it will have around a x35 multiple and the price will be around $6.43.

Is a x35 multiple in 8 years good? I don't know. If all the other coins you have have assessed are lower than x35 then I bet you will consider it highly.

You should plug in other coins and guess their MC in 1-2, 3-5, 6-8 years. This will let you know if XRP is better or worse in relation to your other assessments.

Of course, there are other factors that go into the analysis (I like this write-up):

https://steemit.com/investing/@elderfinancial/my-in-depth-outline-of-how-i-analyze-cryptocurrencies

My way is just a quick and easy way to start the process.

Final thought on XRP: Will XRP represent more of the total market once it matures? In other words you should also figure out if 5% is less or more likely in the future. If it hits its stride it may have more marketshare, or it may have more competition but still be great at just 2%.

As you start looking at candidates to assess there is a ton of quesswork and lots of points where it can alter your final numbers. However, I think something is better than nothing and using some model that you understand and can apply to cryptocurrency candidates to invest or trade in will help out in the long run because the sooner you start the sooner you can start tweaking it.

Hope this helps. Please leave comments if I missed something. I write these posts for you, but it also gives me a chance to review/edit my own models.

Check out my other posts and happy cryptocurrency hunting!

@kryptonaut