XRP (XRP -0.03%) is up an eye-popping 1,100% during the past five years. So where will the crypto be five years from now? The most likely scenario is that XRP will double in value and reclaim its all-time high of $4 from seven years ago.
However, there are plenty of other scenarios. In a bull case scenario, XRP could hit $12.50 by the year 2028 (it now trades for about $2.10). In a bear case scenario, XRP could collapse to zero. That's a wide range of outcomes, so let's take a look at each one.
Base-case scenario
In order to double in value and hit a price of $4 within five years, XRP will need an annualized growth rate of 15%. That's certainly within the realm of possibility, given that XRP has several key catalysts already in place.
The first catalyst is the probable launch of new spot XRP exchange-traded funds (ETFs), which many expect will be approved by regulators in fourth-quarter 2025. These new ETFs will open up XRP for large institutional investors. Theoretically, they should lead to a wave of new money flowing into XRP, much as we saw with the launch of the spot Bitcoin ETFs.
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Moreover, XRP is coming off a major regulatory win. Earlier this year, the Securities and Exchange Commission (SEC) agreed to drop its long-running case against Ripple Labs, the company behind the XRP token. This is the direct result of the new pro-crypto approach of the Trump administration and its shakeup of the SEC. This explains why the price of XRP suddenly spiked in value at the end of last year: The market was already pricing in the effect of the SEC dropping its case against Ripple.
If XRP can get back to business as usual, it could grow at a target rate of 15% per year. Ripple operates a highly regarded cross-border payment network, and XRP is the token that powers this network. So it's really just a case of new institutional adoption and lining up new users for this payment network.
Bull case scenario
But let's think bigger. After all, most XRP investors would not be satisfied with "business as usual." On social media, XRP price forecasts are usually sky-high. Popular search engine searches include "Will XRP Hit $10,000?"
These impossibly high price forecasts are based on one basic assumption: The XRP payment network will eventually power broad swathes of the global financial system. Indeed, Ripple Chief Executive Officer Brad Garlinghouse recently suggested that one goal is to disrupt the legacy SWIFT payments network. If SWIFT's transaction activity shifts to XRP, it could lead to a huge surge in XRP's price.
Moreover, Ripple and XRP are taking aggressive steps to get involved with two of the hottest trends in blockchain finance these days: Stablecoins and tokenization (which refers to transforming real-world assets into digital assets). Aggressive moves here could catapult XRP into a new golden age of growth. If its annualized growth rate reaches 40%, XRP could easily hit $10 within the next five years.
That might sound like pie-in-the-sky thinking, but Standard Chartered thinks it's a real possibility. In April, the bank predicted that XRP would hit a price of $12.50 by the year 2028.
Bear case scenario
However, keep in mind that crypto enthusiasts are usually way too optimistic when making future price predictions. Quite frankly, it's no longer 2020, when XRP was a highly touted crypto with an impeccable pedigree and relatively little competition.
When the SEC launched its case against Ripple in December 2020, many of the top blockchain networks of today -- such as Solana (SOL 0.43%) and Avalanche (AVAX 0.60%) -- had not yet launched. Any money that went into crypto in 2020 naturally went into just a handful of big names, including XRP. But now there are literally tens of thousands of different cryptos, and dozens of different blockchains that can be used for payments.
In fact, just about every week, there's some new development that threatens the future growth trajectory of XRP. Earlier this month, for example, JPMorgan Chase (JPM -0.48%) announced the launch of a new token called JPMD that could pose a competitive threat to XRP. Just like XRP, this token can be used for digital payments, and it can be used to settle cross-border transactions.
For that reason, XRP may have a tough time breaking out of its current trading range. It's now down about 10% since the start of the year, and it's easy to argue that the window of opportunity for XRP is closing quickly. In an ultimate worst-case scenario, XRP might drop to zero.
A range of possible outcomes for XRP
I'm a glass-half-full type of investor. It's impressive what XRP has already accomplished, and so are the innovative steps that Ripple is now taking to get ahead of major trends such as stablecoins and tokenization.
Still, when investing in XRP, it's best to think in terms of a range of possible outcomes. The most likely outcome is XRP doubling in value to hit $4. But there's always a possibility that XRP will defy all expectations, and triple, quadruple, or even quintuple in value to break past the $10 mark.
