XRP/Ripple Valuation & Price Prediction: What is Ripple Price Likely to be by 2020?

Hi Everybody, MS (aka Cryptogem) here. Today, I'd like to talk to you about something that I am very excited about: The cryptocurrency Ripple or XRP and what is likely price of the cryptocurrency by the year 2020. You might wonder why I am talking about cryptos, whose fortunes change everyday for such a long term holding scenario. Let me explain. Ripple is in the business of making cross border payments frictionless, non-time consuming and easy to use at a fraction of the prevailing costs. SWIFT, which is their main competitor in Cross border payments has a dense network with Banks. Banks will likely change to using XRP as their means of Cross Border transaction enablers, given their huge savings in costs. However, this change is not going to happen overnight. It may take at least 3 to 5 years for Banks to realize the Blockchain solution advantages over their present archaic system and get these technological changes implemented.
I know you will find my research worthwhile, as it’s a novel way of valuing XRP. The main problem in Valuation of assets is their ‘Volatility’, especially if they are traded on exchanges. I have made certain assumptions, but the figures I present here are taken from official sources like the Ripple website itself.
A quick disclaimer before we start off. This is purely an article on valuation of cryptocurrencies, cryptocurrencies that I am passionate about and I invest in. However, this should be in no way construed as any investment advice to buy or sell.

Ripple/ XRP Valuation Methodology & Price Prediction:

Ripple is a cryptocurrency, which is partnering with banks to make money transfers easy, transparent, reliable and cost-efficient worldwide. According to the US Treasury department, money transfers all over the world including SWIFT, Fed and other means comprise 2550 Trillion Dollars Every year. The Annual costs of these transactions are approximately 2 Trillion Dollars every year.

By 2020, assuming on a conservative basis, XRP captures 10% of the Market, we are looking at annual cost savings of 200 Billion, which is the value added by using XRP. Now given that current coins in circulations is 38 Billion and from the Escrow created, they are going to release 1 Billion coins every month for the next 4 years or so, by start of 2020 we are going to have 62 Billion coins in circulation. Dividing the cost savings of 200 Billion by 62 billion, we get $ 3.22 Dollars, which I believe should be the value of XRP. That is nearly 13X valuations from current levels.

Under a Blue sky scenario, assuming XRP captures 70% of the market, we get a XRP value of $ 22. Also, like you mentioned, the other intangible benefits that it provides because of which it may potentially be considered 'money' in its own right.

Scenarios
10% 20% 30% 40% 50% 60% 70%
**Market Share ($ Bn) 200 400 600 800 1000 1200 1400
**XRP ($) 3.2 6.5 9.7 12.9 16.1 19.4 22.6

Long Term Technical Analysis of XRP

Weekly Chart of XRP

I am not sure how many people reading this know about technical Analysis of Assets. In brief, Technical Analysis is a method to arrive at price targets of Assets like currencies, stocks, commodities by evaluating and analyzing Price Charts.
The Figure above shows the weekly chart of XRP. I attempt to value XRP over the Long term using the weekly Chart of XRP.

First, I will demonstrate to you how this valuation methodology has worked in the past for Ripple. In the week of 27th March, 2017, XRP made a low of USD 0.00837. It started a meteoric rise after making that low and reached a high of USD 0.08162. This low price to high price is an increase in price of 13.57X or 1357%. This was a ‘Flag and Pennant’ formation on the Charts and the natural target for this kind of pattern Formation is the size of the Flag Pole (which in this case is 1357% or 13.57 X). So the target will be 13.57 times the high of 17th April (which is USD 0.0377 * 13.57), which is USD 0.51. Ripple nearly reached its target touching a high of 45 cents. So, we have proved that this method works.

Now, lets focus our attention to the next projected target based on this technique of long term analysis. From the high of 17th April to the High of 15th May, 2017 when the target was reached, XRP gave a return of 12.38 times the original investment or 1238%. Projecting this Multiple onto the high of last week (USD 0.32), we arrive at a valuation of USD 3.96.
Price Prediction of XRP
XRP has been consolidating in the 20 to 30 cents range for 6 months now. In technical Analysis parlance, this is known as a ‘Time Correction’.

Ripple Tech has pledged to put its holdings of XRP tokens into an escrow account in Dec 2017 and plan to release only 1 Billion Coins per month based on their working capital requirements. The Circulating Supply overhang of XRP will be eased and this will lead to a steady rise of Ripple starting from 2018. However, in my humble opinion, this promises to be a much steadier rise as opposed to other altcoins, since Ripple Tech would want to keep the volatility of its currency to a minimum. This will help prove to Banks that this token can be used for cross border payments effectively and the transfer amounts will not be very volatile.

Price Prediction

Based on my above Technical Analysis, I project that by the end of 2020, we may see the price of XRP at USD 4, which is also roughly a 15% Market share of Money transfers worldwide.
I would love to know your thoughts on this article. Please upvote me if you like my thoughts!