XRP Market Cap Calculation

Jake Claver

Most people still don’t understand how XRP's market cap actually works. They're using outdated stock models and missing the bigger picture. The liquidity is coming.

Transcript

00:00When XRP was showing at 50 cents, there wasn't much TA to do on XRP, right? You're not really

00:05playing around with much. Now that it's been moving, one of the things that I've been closely

00:10watching has been the order books and the inflows. And something that we've talked about is this

00:15market cap multiplier is the term that I use. And basically what we've observed is the market

00:20cap multiplier on XRP is anywhere from 50 to 200X on the way up. And I've seen it interacted even

00:27more dramatic on the way down where the multiplier has been 500 or 900X. And what that means is if

00:33a billion dollars is coming into XRP through the order books, that the market cap is going to grow

00:38by 50 billion. So it's not a one-to-one ratio. And there's been this whole miscommunication,

00:43misunderstanding really of how this works because people are locked into that traditional mindset

00:48of market cap to value stocks versus trying to value this technology and this network

00:54and understanding that these assets are actually much more illiquid than the stock market is.

01:01And so they move much more dramatically. But to this point, folks think it's crazy to talk about

01:07these high numbers. Even talking about $30 XRP, people say I should be shut down. Well, let's look

01:14at the math. I did the numbers. And if JP Morgan's prediction, and don't come at me, bring it up with

01:20JP Morgan. They predict $4 billion to $8 billion of inflows into XRP ETFs year one. Now, I ran with

01:27the 200X multiplier on that. It brings us to a market cap growth of $1.7 trillion. That's trillion

01:34with a T. And if XRP is at a market cap of a couple hundred billion at the time, you're running up

01:39towards a $2 trillion market cap. It's a $30 XRP with the $58 billion circulating supply that we just

01:45hit. So it's going to take way less inflows to get us to these astronomical far off market caps than

01:54what people have traditionally been thinking. When I started to go through this exercise and follow

01:59these numbers, I got way more bullish because I realized, wow, it's going to be way easier to get

02:04to these high price targets than I'd previously thought. And so people will call us crazy for talking

02:10about $30 XRP, $100 XRP, $1,000 XRP, because they're doing the market cap calculation. And

02:18they're saying, well, Zach, that's 50 trillion market cap. That's bigger than all the stocks

02:21combined. And you say, well, yes, this is solving a problem that's quite frankly, bigger than all the

02:26stocks combined potentially. And to your point, if we just get slivers, little pieces of this action

02:32on SWIFT derivatives, and we could easily see XRP go to these prices, you combine that with the

02:38inflows on the ETFs, etc. It's going to be a lot easier to go to these higher prices than people

02:43are thinking.

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