Chad Steingraber, professional game designer and prominent figure in the XRP community, recently updated his theory, originally published in August 2022, about the possible future price of XRP. Dubbed “The Chad Steingraber Theory,” it presents an intricate roadmap predicting XRP’s journey toward a staggering $20,000 mark.
Central to Steingraber's argument is the principle of asset scarcity in relation to supply and demand. He explains how scarcity, much like an auction in which numerous bidders compete for a limited asset, can increase the value of the asset.
“Asset scarcity, part of supply and demand, is also a problem, like an auction where many people bid for a limited set of assets that only some of them can own. This can increase value, it ONLY stops when no one else is willing to pay a higher price,” she notes, underlining how this scarcity could be a driving force for XRP valuation.
Steingraber also delves into the realm of market appreciation and “ghost money.” He clarifies 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 its perceived value today. Additionally, he introduces the notion of “ghost money”, stating that market capitalizations often reflect perceived, rather than actual, invested value.
“Today, the market capitalization of XRP is $30 billion… but wait, that doesn't mean $30 billion of money has actually been invested in XRP. (…) There is much less, since market capitalization is only a reflection of the current value that anyone is willing to pay. Phantom Money, remember? Steingraber explained.
By drawing parallels to unique and limited assets like the Mona Lisa, Steingraber highlights the perception of value. He notes that value is often attributed based on uniqueness and social importance, stating: “The Mona Lisa is valuable because it is the only one… That value is in our minds.” This analogy serves to emphasize the perceived value of the currency in the cryptocurrency market.
“The Chad Steingraber theory”: the road to $20,000 #XRP
A thread from the future (UPDATED)It's been a year and a half since I wrote this original thread and a LOT has happened, including some parts of this theory.
Grab a drink, grab a snack, and let's go for a walk, okay? https://t.co/TU7CLwwh1T
—Chad Steingraber (@ChadSteingraber) December 30, 2023
Banks will raise the price of XRP to $20,000
Central to Steingraber's theory is the idea of banks holding XRP as a reserve asset, similar to gold. He explicitly states: “Banks holding XRP, that is the Holy Grail,” emphasizing the potential change in the way financial institutions perceive XRP. This change would elevate the status of the cryptocurrency, positioning it not only as a transactional cryptocurrency but as a fundamental asset in banking operations.
Steingraber imagines a future where banks will create private ledgers for internal operations, requiring substantial reserves of XRP. “Banks will create a private ledger and HOLD XRP as a reserve asset, the same way a central bank will hold gold as a backup asset,” she explains. This approach to using XRP reflects the traditional banking system's dependence on gold, suggesting a paradigm shift in digital asset management.
The theory also highlights the crucial role of liquidity centers, such as Metaco, in this new banking ecosystem. Steingraber notes that these centers would need to hold large balances of XRP to facilitate transactions between banks. “LHs also maintain an XRP balance because they ARE the third-party exchange that requires a transfer in the
A key aspect of Steingraber's theory is the resulting scarcity of XRP on the public market as banks accumulate it. He predicts a significant shift in public supply, stating: “The circulating public supply of once they have it… IT’S GONE.” This anticipated shortage is expected to trigger FOMO among financial institutions, leading to a rapid depletion of the public availability of XRP.
Steingraber's theory culminates in projecting a massive rise in the price of XRP, driven by the combined effects of banks treating it as a reserve asset, the creation of private ledgers, the crucial role of liquidity and the resulting shortage of public supply. He posits a future in which the value of the cryptocurrency could skyrocket due to these factors, potentially reaching as high 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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