Chad Steingraber, professional game designer and prominent figure in the XRP community, recently updated his theory, originally published in August 2022, on the potential future price of XRP. Dubbed “The Chad Steingraber Theory,” it lays out a complex roadmap predicting XRP’s journey to the staggering $20,000 mark.
At the heart of Steingraber’s argument is the principle of asset scarcity in relation to supply and demand. He explains how scarcity, just like in an auction where many bidders compete for a limited asset, can drive up the value of the asset.
“Asset scarcity, which is part of supply and demand, is also a problem, as in the case of an auction in which many people bid on a limited set of assets that only some of them bid on. ‘among them can own. This can drive the value up, it ONLY stops when no one else is willing to pay a higher price,” he notes, highlighting how this scarcity could be a driving force for XRP’s valuation.
Steingraber also delves into the area of market appreciation and “shadow money.” It explains how the current price of an asset can reflect its anticipated future value, a concept similar to selling the idea of a desirable future home on valuable land at the perceived value today. It further introduces the notion of “shadow money”, indicating that market capitalizations often reflect perceived value rather than actual invested value.
“Today the market cap of XRP is $30 billion…but wait, that doesn’t mean $30 billion of money was invested in XRP. (…) There are much fewer, because market capitalization is only a reflection of the current value that everyone is prepared to pay. Phantom Money, remember?, explained Steingraber.
Drawing parallels with unique and limited assets like the Mona Lisa, Steingraber highlights the perception of value. He points out that value is often assigned based on its uniqueness and societal importance, stating: “The Mona Lisa has value because she is the only one… This value is in our minds. » This analogy serves to highlight the perceived value of the coin in the cryptocurrency market.
“The Chad Steingraber Theory” – The Road to $20,000 #XRP
A thread🧵 from the future (UPDATE)
It’s been a year and a half since I wrote that original thread and A LOT has happened, including parts of this theory.
– Chad Steingraber (@ChadSteingraber) December 30, 2023
Banks will raise the price of XRP to $20,000
At the heart of Steingraber’s theory is the idea that banks hold XRP as a reserve asset, similar to gold. He explicitly states: “Banks holding XRP is the Holy Grail,” highlighting the potential shift in how financial institutions view XRP. This change would elevate the cryptocurrency’s status, positioning it not only as a transactional cryptocurrency, but also as a fundamental asset in banking operations.
Steingraber envisions a future in which banks create private ledgers for internal operations, requiring large XRP reserves. “Banks will create a private ledger and hold XRP as a reserve asset, similar to how a central bank will hold gold as a backing asset,” he explains. This approach to using XRP reflects the traditional banking system’s reliance on gold, suggesting a paradigm shift in digital asset management.
The theory also highlights the crucial role of liquidity hubs, like Metaco, in this new banking ecosystem. Steingraber emphasizes that these hubs should maintain large XRP balances to facilitate transactions between banks. “LHs also hold a balance of XRP because they ARE the third-party exchange that requires a transfer on XRPL from the issued IOU derivative to another IOU derivative,” he notes, highlighting the importance of
A key aspect of Steingraber’s theory is the scarcity of XRP in the public market as banks accumulate it. He predicts a significant change in the public supply, stating: “The public supply of XRP circulating on crypto exchanges is much lower than people think… Banks, when they are ready, are coming for the supply public of XRP and once they have it… IT’S GONE. .” This anticipated shortage is expected to trigger FOMO among financial institutions, leading to a rapid depletion of public availability of XRP.
Steingraber’s theory culminates in the projection of a massive increase in the price of XRP, driven by the combined effects of the treatment of banks as a reserve asset, the creation of private ledgers, the crucial role of liquidity centers and the resulting scarcity of public supply. He envisions a future in which the value of cryptocurrency could skyrocket due to these factors, potentially reaching as much as $20,000.
At press time, XRP was trading at $0.61406.
Featured image created with DALL·E 3, chart from TradingView.com
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