Like its digital asset peers, XRP (XRP -4.29%) has had a wild journey up to this point. The Ripple network's native token has had periods of monster price run-ups and dips in the past several years. But it currently trades 78% off its all-time high from January 2018.

As of this writing, Ripple has the world's seventh most valuable blockchain, worth just over $32 billion. But is it a smart idea to buy XRP right now with $100 and hold it through 2024 and beyond?

Rippling through the financial services sector

To be quite frank, the vast majority of cryptocurrencies out there are utterly useless, and many are even scams. Lawmakers are still trying to figure out how to regulate the quickly evolving industry. But that doesn't stop people from creating new tokens all the time.

I do believe the market will eventually shake out the losers. Consequently, the long-term success of any cryptocurrency depends on it being able to solve a problem in a way that a critical mass of people find useful. Here's where XRP actually stands out from the crowd.

The Ripple network's overarching goal is to make it incredibly fast (in seconds) and cheap (costing fractions of a penny) to send money across borders. Think of the network, called RippleNet, as a bridge that connects two different fiat currencies. Someone might transfer their U.S. dollars into XRP tokens and send them across the blockchain to someone in India, who then can convert the crypto to their native currency, the rupee.

Hundreds of billions of dollars are sent as remittances every year. If using XRP facilitates a better experience for all stakeholders, then it can find greater adoption.

But this doesn't include the money that bigger parties, like corporations, banks, and governments, send across borders. I'd suspect this market is easily in the tens of trillions of dollars annually. It's clear that the XRP token is targeting a massive opportunity.

Top risk factors

Of course, the risks that cryptocurrencies face are notable. And XRP is no different.

In recent years, the Ripple network has dealt with regulatory uncertainty on XRP's status as a commodity or security. The Securities and Exchange Commission (SEC) ruled that the sale of tokens to professional investors violated rules, and the agency ordered Ripple to pay a fine of $125 million. This was well below the original request of $2 billion. Even with what looks like a victory, an appeal could happen, which could create headaches that drag on for years.

The financial services sector is one of the biggest and most powerful in the world. To its credit, Ripple has partnered with financial institutions that want to test how blockchain technology can improve their business practices. But I'm skeptical that the big banks that handle most worldwide capital flows will cede power to Ripple by using XRP, unless they want to lose a major money maker of their own.

The dominance of Bitcoin is also a risk to the ultimate success of XRP, in my opinion. With a $1.2 trillion market cap, the leading crypto network can perhaps find more utility for more frequent large money transfers. To be fair, it needs to develop scaling solutions that can successfully speed up transactions. But given its decentralized nature, particularly the fact that no one controls it, it can be valuable in the global financial system where no single country or entity will be favored.

Lots of uncertainty

I think it's virtually impossible to figure out where XRP will be five or 10 years from now. There is a wide range of outcomes, depending entirely on variables that are hard to predict with any level of certainty.

If you're still bullish and have a high risk tolerance, then I suggest investing $100 as part of a very well-diversified portfolio. Just make sure to have patience for things to play out.