It's been a strong run for several cryptocurrencies in 2025, few more so than XRP (XRP -1.12%), the third largest cryptocurrency in the world with a market cap of about $190 billion (as of July 28).
XRP is known for its strong network, which is capable of processing up to 1,500 transactions per second, making it highly scalable and ideal for cross-border payments. Since settling a long-standing lawsuit with the U.S. Securities and Exchange Commission (SEC), XRP has taken off this year, up over 35% and much more since Donald Trump won the presidential election last year.
While investors have likely grabbed the low-hanging fruit, there are other potential catalysts that could be bullish for XRP later this year. Here are three.
Image source: Getty Images.
1. A spot XRP ETF
Getting past the SEC lawsuit was a big deal for XRP for several reasons, and ending the regulatory uncertainty could pave the way for a spot-XRP exchange-traded fund (ETF). Spot-crypto ETFs attempt to mirror the price of whichever cryptocurrency they are tracking by actually buying the cryptocurrencies themselves, and then assigning shares to a certain amount of that cryptocurrency.
Spot-crypto ETFs have launched for other large cryptocurrencies like Bitcoin and Ethereum and proven to be bullish, increasing liquidity and institutional interest. Most investors believe that spot-crypto ETFs are only a matter of time for some of the larger altcoins like XRP and could happen as soon as this year. As of this writing, Polymarket placed the odds of an XRP spot ETF getting approved in 2025 at 85%, lower than highs seen this year, but still a very good chance.
The SEC has been a bit back and forth on approving spot crypto ETFs. On one hand, it seems more than open to the idea but is not rushing to approve them like other crypto initiatives. Bloomberg senior ETF analyst Eric Balchunas recently said on X:
I think [the SEC] want[s] to put out their generic listing standards first [for spot-crypto ETFs], which is probably coming soon. Get comments. Implement. in time October due dates. That's my theory anyway.
2. Bitcoin continues to perform well
The crypto sector has largely moved in unison, heavily influenced by Bitcoin, the world's largest cryptocurrency. Bitcoin has long been viewed as a bellwether for the industry. This year, however, Bitcoin has begun to break away from the pack, moving higher all year as many cryptocurrencies stalled or even declined.
Many now view Bitcoin as a form of digital gold, which can hedge inflation and serve as important diversification as the U.S. government's finances continue to get more and more out of hand. As more regulation passes, more institutional investors are getting involved and starting to buy Bitcoin. The more Bitcoin is in the spotlight, the more interest there will be across the sector and in other cryptocurrencies, and the more likely it will become for institutional ownership.
XRP is a logical place for investors to look because it's one of the largest cryptocurrencies and has a scalable network. Additionally, Ripple, the company behind XRP, is doing a lot of work with more traditional financial institutions, which in my view would make them more inclined to invest in XRP as opposed to another altcoin.
3. Falling interest rates
Cryptocurrencies have typically performed well in a falling interest rate environment, namely because investors begin to take on more risk as bond yields come down, and cryptocurrencies have previously benefited in a similar way as tech stocks. Now, with the market hitting all-time highs, it's hard to say that we aren't currently in a risk-on environment.
After all, the Federal Reserve began cutting interest rates at the end of last year before going on pause, so technically one could argue that we are in a falling interest rate environment. However, bond yields are still somewhat high, still offering attractive yield, so if rates were to keep coming down, that could continue to benefit cryptocurrencies like XRP, so long as the Fed is not doing cuts because of a recession.
Traders using futures to bet on the moves in the Fed's federal funds rate expect four interest rate cuts between now and the end of 2026.
Should You Buy XRP?
XRP is certainly one of a handful of cryptocurrencies that I find intriguing, with its strong network and ties to Ripple, which seems to be making inroads when it comes to bridging the gap between cryptocurrencies and institutional investors and mainstream finance.
But there is still a lot of uncertainty in the broader economy and we don't know exactly where interest rates will go. Additionally, other cryptocurrencies run on strong technical networks that could challenge XRP. XRP has also been volatile in the past and cryptocurrency prices are very difficult to predict, so I would still keep positions smaller and more speculative for now.
