XRP (XRP +8.82%) is a compelling investment opportunity because it offers investors the chance to get upside from the fees the coin generates from handling money transfers on its network. But there's a lot more going on with this coin than passing funds from one place to another.
In fact, it's now breaking into another area that will make it an even more attractive place to invest for its core market, banks, and other financial institutions. And that's likely to be a big catalyst for the coin's price. Here's what you need to know and how it bolsters the reasons for buying this coin.
CRYPTO: XRP
Key Data Points
This asset clears the way for more adoption
U.S. Treasury bills and notes are, at least historically, among the world's safest and most widely held assets. They're great because they provide a regular yield, which for investors means a cash flow that's backed by the credit and good faith of the U.S. government. As of Feb. 21, investors could expect an annualized yield of nearly 4.7% for a Treasury bill maturing in 20 years.
Investors who want to buy and hold Treasuries can typically do so from the traditional financial accounts they use to invest. But until recently, there wasn't any way to hold Treasuries on the XRP blockchain. For a potential user like a big international bank, that's an impediment, as such institutions are often in the business of trading Treasuries with each other and using them as collateral for their many financial activities.
In late January, Ripple, the business that issues XRP, reported that through a partnership with Ondo Finance, it would be offering the ability to purchase short-term U.S. Treasuries that are tokenized (tradable and traceable) on the XRP blockchain. The move builds on a much smaller tokenized Treasury program that was launched on XRP in August 2024 and was likely far too small to attract significant interest from institutional players, who need to be able to transact with deep Treasury markets in order to accomplish their goals. With $600 million in total value locked on Ondo's Treasuries-trading platform, there's more than enough size for larger banks to find useful this time around.
And that's why it's likely to be a significant driver for higher XRP prices. Banks that were already using the coin for lowering currency transfer fees, one of its core uses, can now potentially reduce their transaction costs for trading Treasuries too. There's now an even larger incentive for them to transfer their funds and hold them on the XRP chain, which is also one more reason to buy the coin and hold it forever.
This isn't the only recent catalyst that could make a big impact
XRP is having a strong 2025 so far, and granting investors access to tokenized Treasuries is hardly the only factor in play right now.
The Securities and Exchange Commission might soon approve an exchange-traded fund (ETF) holding XRP, which would increase the liquidity and transaction volume on the chain, creating more fee revenue to use on upgrading the network. It might also be included in a U.S. cryptocurrency repository, if such a thing is ever created by lawmakers. Regulators in the U.S. and elsewhere are becoming increasingly dovish toward crypto, reversing their previous wariness. Furthermore, many new international financial institutions are onboarding their assets and using XRP to transact with each other.
As a group, these new developments are shaping up for a very bullish 2025 for this coin. There's always a risk that some of these catalysts aren't as strong as anticipated or that they don't play out at all. Nonetheless, the balance of risk and reward is very much in favor of investors who buy XRP now, and that's likely to remain the case for at least another quarter or two.
The icing on the cake is that most of the things pushing prices higher will be in action for the long term. After all, banks can trade Treasuries on the chain today, and they will probably end up actually trading them for years and years, depositing a tiny fee back to the chain each time they do. And that's money which should trickle back to investors over time in the form of higher prices.
