XRP (XRP -1.81%) appears to be on the verge of a major breakout. A big legal victory this summer in the crypto token's long-running court case against the Securities and Exchange Commission (SEC) has galvanized new optimism about where XRP could be headed next. For the year, XRP is now up 50%.
But getting to the $1 mark might be more challenging than it seems. XRP has given up nearly all of its gains from this summer and is back to trading near the $0.50 level. With that in mind, here's a closer look at two catalysts that could help XRP double in value and reach the $1 mark.
Resolution in the SEC court case
The conventional wisdom among XRP bulls is that Ripple, the company behind the XRP crypto token, is close to winning its court case against the SEC, and everything from here on out is just a formality. Ripple even hosted a victory party in New York City at the end of September to celebrate its big legal win. From this perspective, Ripple is like the football team that is just seconds away from victory, and everybody in the stadium knows the quarterback is just going to take a knee and run out the clock.
But hang on a second. Even after its big legal win this July, top Ripple executives have acknowledged that the SEC case is far from over. It all hinges on a decision by the SEC to appeal the court ruling from this summer. If the SEC is digging in for a long fight, then this could lead to another long, protracted legal battle. In a worst-case scenario, says crypto lawyer John E. Deaton, this case could drag out into 2026. Yikes! That's after nearly three years and more than $200 million in legal fees already paid out by Ripple.
So getting some sort of settlement in this case is key. No company can sustain being in legal limbo for years at a time, especially in a fast-changing industry like the blockchain and crypto industry. That explains, in large part, why XRP has given up all of its gains since July. Thus, for XRP to double in value and hit the $1 mark, there needs to be regulatory clarity in the SEC case so it can get back to business as normal.
Ripple IPO
The other potential catalyst is an initial public offering (IPO) for Ripple. This idea of a Ripple IPO first started to gain momentum in early summer and has since intensified over the past few months. A Ripple IPO would potentially be as much of a game-changer as the Coinbase Global (COIN 5.68%) IPO was in 2021. A huge, splashy IPO for Ripple would help replenish the company's legal coffers, while also providing expansion capital for the Ripple payment platform, which uses XRP as its governance token.
Image source: Getty Images.
Long story short: A Ripple IPO would potentially be huge for XRP. Some analysts are predicting XRP to surge 20 times its value in the event of a successful IPO, lifting the crypto token from its current level of $0.50 to a whopping $10.
The big question, though, is just how likely such an IPO really is, given that it requires SEC approval. Moreover, if you parse through recent comments made by Ripple executives, they seem to be noncommittal about whether or not Ripple even wants an IPO. This IPO talk could just be the result of the XRP hype machine running on overdrive.
How probable is a $1 price target?
If Ripple finds some way to bring closure to its long-running legal battle with the SEC, then getting to $1 is highly plausible. We saw that this summer when Ripple doubled in value in just one day, skyrocketing from $0.48 to $0.95 on news of the big SEC legal win.
My concern, though, is that this XRP legal situation could start to stretch out beyond 2024, and that's highly problematic. It likely means XRP will continue to trade within a relatively narrow range for the foreseeable future, always with the promise of a big victory right around the corner.
If you believe in the long-term promise of XRP and its ability to power the Ripple payment platform, then getting in now could be highly profitable later. But if you're only looking for a quick momentum play from a bargain-priced crypto, you might be better served looking elsewhere.
