Despite a remarkable increase in valuation, XRP remains significantly undervalued, according to crypto commentator Zack Rector.
Ripple’s continued growth, coupled with its substantial XRP escrow holdings and business expansion, presents what many believe is a compelling investment opportunity as the market heads into 2025.
Let’s break down the key factors driving this perspective, including Ripple’s current valuation, XRP’s price potential, and the company’s broader growth initiatives.
Ripple’s Current Valuation
Ripple’s valuation has surged in 2024, now estimated at $20 billion on pre-IPO private markets such as Linqto. This marks a substantial increase from its previous valuation range of $7 to $10 billion over the past two years.
Ripple’s Stock and Pre-IPO Market
- Ripple’s equity is not yet publicly traded on major stock exchanges like NASDAQ or NYSE.
- Access to Ripple’s stock is limited to pre-IPO private markets, primarily catering to accredited investors and institutions.
Even at its current valuation, Rector believes Ripple is undervalued given the scale of its operations and assets, especially its XRP holdings.
XRP Escrow Holdings: A Key Valuation Driver
Ripple holds approximately 40 billion XRP in its escrow account. At XRP’s current price of $2.08, this stash is worth a staggering $83 billion.
Previous Valuation Mismatch
- In 2024, when XRP traded at around $0.50, Ripple’s escrow holdings were valued at $20 billion—more than double Ripple’s company valuation at the time.
- Despite XRP’s price increase, the valuation still doesn’t fully reflect the value of Ripple’s escrow holdings.
This discrepancy underscores why many analysts, including Rector, argue that Ripple and XRP remain significantly undervalued.
XRP Price Potential
Analysts have set ambitious price targets for XRP as it continues its recovery:
1. Conservative Target: $8.40
- Ali Martinez, a prominent market analyst, believes XRP could reach $8.40 based on its technical breakout from a seven-year downtrend.
2. Optimistic Target: $48 by 2025
- Martinez’s bullish scenario envisions XRP climbing to $48 as market conditions improve and Ripple’s ecosystem expands.
- If realized, this would drastically increase the value of Ripple’s escrow holdings, enhancing its overall valuation.
Ripple’s Expanding Business Ventures
Ripple is diversifying beyond XRP into high-growth areas like stablecoins and custody services, bolstering its long-term growth potential.
Recent Developments
- Stablecoin Launch: Ripple introduced its own stablecoin this month, entering a market dominated by players like Tether.
- Custody Services: Ripple is positioning itself as a key player in crypto asset management, targeting institutional clients.
These moves align Ripple with broader market trends and position it for continued success, both as a crypto pioneer and as a technology-driven company.
While Ripple’s valuation has climbed to $20 billion, experts like Zack Rector argue it still falls short of reflecting the company’s true value, especially considering its $83 billion XRP escrow holdings and business diversification.
With price targets as high as $48 for XRP by 2025, Ripple’s growth trajectory could redefine its market standing. As Ripple expands its reach into stablecoins and custody services, the company is poised for substantial long-term growth, solidifying its role as a leader in the crypto industry.
