In a recent phase of Empire PodcastJeff Dorman, CIO of the ARCA, has broken how to check the true value of crypto assets.
According to Dorman, there are three types of value: financial, utility, and social. The amount of finance comes from real revenues or cash flows. The value of the utility is derived from how benefit a token is, and the value of society is derived from community support. The best crypto projects should have all three, but having one or two can still be important.
Jeff explained that even if something is financially or utility value, it still has value. But if it only has a social value – such as fame or community – this is not enough unless it leads to real financial value.
The expert used XRP as an example. Jeff said the XRP was 'insanely' overvalued, with a market cap of around $ 131 billion, despite the lack of strong financial value or utility. Its value now is based on its long -standing and honest community. But social value can lead to real financial use in the future.
“When people ask if Ripple is worthless, I say, 'It's not worthless, I just can't determine its value.' This is such a really expensive option to call what it may be in the future, “he said.
He compared the XRP to Gamestop, saying that most people were driven by the social hype. But that hype can be something real – just as Gamestop used its popularity to raise money and buy Bitcoin.
Fake it until you can do it?
However, he said that Ripple's long history and honest community became a symbol of the crypto potential to change finance.
He described Ripple's approach as “fake it until you do it,” where companies first build social value and eventually use it to create real opportunities, such as startups raising funds before earning a profit. Ripple has recently created titles after obtaining Hidden Road, having access to a new business and a US broker-dealer license.
