With XRP (XRP 0.75%) down by about 15% during the past three months, but up by 410% during the past year, it's no wonder an investor might be confused about whether to invest in it, hold it, or dump it. In crypto, time doesn't necessarily heal all wounds, and if the coin is no longer fitting with what the market is demanding, there could be a long way down from here.
So what's the right move? Let's go over the cases for and against XRP and figure it out.
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The long-term picture looks fairly good
XRP's investment thesis is that it offers financial institutions faster transaction settlement, lower international account pre-funding needs for cross-border transfers, and regulatory compliance tooling that makes using its chain to send money and manage assets easier than it would be elsewhere.
XRP's issuer, Ripple, also runs a parallel payments network and offers a stablecoin called RLUSD, which means users of the XRP Ledger (XRPL) can choose to transact in either the native token (XRP) or in the fiat currency-backed stablecoin of their choice, giving them more flexibility.
The payments network is operating at a large scale already. It covers more than 90% of daily foreign exchange (FX) markets with more than 90 payout corridors, and it has processed north of $70 billion in cumulative volume.
CRYPTO: XRP
Key Data Points
Beyond payments, tokenized real-world assets (RWAs) are a second vector for value that's becoming even more important. While XRP's share of the RWA market is still small today, with about $362 million in value, the pie itself keeps growing quickly, and the XRPL is explicitly positioned for capturing tokenization workflows for asset managers that have high regulatory compliance requirements.
So, this mix of utility, integrations, RWA management, and regulatory tooling will give XRP good odds of increasing in value over time, as financial institutions don't really have anywhere else in the crypto sector to go where they can get the same combination of the features they need.
The sell case is real
The case for selling XRP is essentially that it has a lot of competition, and it will have even more over the long run.
For example, banks are developing and deploying their own digital asset transfer systems. JPMorgan Chase's Kinexys platform advertises 24/7 cross-border payment flows with near-real-time transaction settlement, with all of it integrated into existing systems. If large banks keep rolling out their own networks, third-party cryptos face an big adoption hurdle.
Then there are the crypto competitors. Stellar is entrenched in cash-to-crypto and remittance routes with major partners like MoneyGram. And newly announced blockchains, like Tempo, which is made by the payments company Stripe, will also directly challenge XRP's market share. On top of that, stablecoin networks on multiple chains like Tron already move dollars at internet speed.
XRP must thus prove that its compliance features, settlement mechanics, and Ripple's suite of financial services can beat these alternatives for banks and fintechs at scale. At least so far, it has thrived, but it's important to note that the operating environment it experienced in the last five years was significantly less crowded with major rivals than it will be in the years to come.
So where does all of this leave investors?
XRP can probably continue to grow over the long term, even in the face of other players encroaching on its turf; this crypto asset is generally worth owning. Still, if you need certainty of preserving your capital or you're desperate for near-term outperformance for some reason, the intensifying competitive field and the requirement for smooth execution argue for watching or holding XRP rather than buying more. On the other hand, if you want to diversify your portfolio with some exposure to cryptocurrencies with real value, buying some XRP makes sense, assuming that you're willing to hold it for at least three years to let Ripple's development roadmap for the network's future play out a bit more.
