Twice this year, XRP (XRP 1.53%) has made a run at the $4 price level. And twice the rally has fallen just short. In July, for example, XRP topped out at $3.65, a new 52-week high.
So investors are understandably awaiting another breakout for XRP, as well as a new all-time high. But will it come in 2025, as many expected earlier in the year?
Good news on the regulatory front
For much of the past five years, a dark regulatory cloud has hung over XRP, which is designed to make institutional money transfers faster and cheaper than legacy systems now in use. Back in December 2020, the Securities and Exchange Commission (SEC) claimed that XRP was actually a security, and that the sale of XRP tokens to the public was actually a sale of unregistered securities.
The good news is that the case finally wrapped up in August, with Ripple Labs (the creator of the XRP token) agreeing to pay a $125 million fine. That's a tough pill to swallow, but the thinking at the time was that it would free up Ripple to get back to business and that all of the company's regulatory troubles were in the rearview mirror.
Image source: Getty Images.
So, if you're a glass-half-full type of investor, good news on the regulatory front means that XRP could be headed for a blockbuster end-of-year rally. At the very least, it makes the approval of new XRP investment products by the SEC a near-certainty. Currently, Bloomberg gives the spot XRP ETFs a 95% chance of approval this year.
Spot XRP ETFs
The current hope is that the launch of these new ETFs will provide a lift when XRP needs it the most. The thinking here is that XRP will follow the trajectory of Bitcoin (BTC 0.85%) after the new spot Bitcoin ETFs were approved last year. As soon as the new spot Bitcoin ETFs started trading, the price of Bitcoin soared.
The only problem here, though, is that there is not nearly the same level of institutional investor enthusiasm for XRP as there was for Bitcoin in 2024. The easiest way to see this is by checking out the latest digital asset fund flow report from CoinShares. According to the report from Sept. 22, $977 million flowed into Bitcoin, and another $772 million flowed into Ethereum during the week. But XRP was a distant fourth, with only $69 million.
Moreover, the recent launch of the REX-Osprey XRP ETF has been a nothing-burger so far. While early reports played up the amount of money that flowed into this new XRP ETF on the first day of trading, it has had little or no impact on the price of XRP. On Sept. 18, the price of XRP was $3. A week later, the price of XRP is actually below $3.
So maybe investors are overstating the significance of SEC approval of XRP ETFs. Yes, ETFs are helpful in terms of mainstream adoption. But the amount of money flowing into them may be too insignificant to matter. Remember: XRP is now a $173 billion digital asset, and it requires billions of dollars in new money to move the price significantly higher.
Fed rate cuts
The final catalyst that could push XRP past the $4 mark involves monetary easing from the Federal Reserve. The first rate cut of the year took place on Sept. 17, and more rate cuts could be on the way in late 2025 or early 2026.
In theory, monetary easing will lead to more money flowing into risky, speculative assets such as XRP. That's because lower rates make safe, interest-bearing assets less attractive, increasing the incentive to move into risky crypto assets. This dynamic has worked time and time again, and many thought the first Fed rate cut would light a fire under the price of XRP.
Thus far, that hasn't happened. The big question is why? Most likely, traders had already priced in a 25-basis-point rate cut, and there wasn't any more juice left to be squeezed. So if the Fed doesn't embark on an aggressive easing campaign from here, XRP may face steep resistance climbing any higher.
What do the prediction markets think?
The good news is that online prediction markets are still relatively bullish on XRP. According to traders, XRP has a 32% chance of hitting $4 this year, and a 17% chance of hitting $5.
Perhaps the biggest lesson here is to ignore all the hype and buzz around XRP, and focus on the facts. Sure, there's a potential case to be made that XRP should be a $4 asset, but it has never traded higher than $3.84 in its entire 13-year history. So, most likely, XRP investors will have to wait for the emergence of new catalysts in 2026 for a major breakout to the upside.
