Not all cryptocurrencies have a legitimate purpose, so they lack an organic source of demand, which is why they often suffer extreme volatility and struggle to maintain their gains.
XRP (XRP +0.31%) is one of the exceptions because it was created as a bridge currency for the Ripple Payments network, which allows banks to send money around the world instantly, and with negligible costs.
Ripple scored a big regulatory win in the U.S. earlier this year, which was a key reason XRP soared to a seven-year high. But that momentum quickly faded, and the token is trading at about $2.10 as I write this, which is more than 40% below its recent peak of $3.65.
The Trump administration is likely to continue offering regulatory support for the crypto industry in 2026, and Ripple Payments should also experience further growth. With those tailwinds in mind, could XRP cross the milestone price of $5 per coin next year?
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Ripple is no longer fighting the Securities and Exchange Commission
The global financial system is very sophisticated, but not every bank uses the same payment infrastructure. Therefore, banks in some countries need to use intermediaries when sending money across borders, which creates delays and adds costs. Ripple Payments solves this problem by allowing banks to communicate with one another directly no matter what existing infrastructure they use, which facilitates instant transfers.
XRP was designed to standardize each transaction. For example, a Japanese bank can send XRP tokens to a European bank instead of sending Japanese yen, which eliminates expensive foreign exchange fees. The transaction in XRP can cost as little as 0.00001 tokens, or a fraction of $0.01.
CRYPTO: XRP
Key Data Points
The cryptocurrency has a total supply of 100 billion tokens, with 60.3 billion in circulation, and the other 39.7 billion in the custody of Ripple, which gradually releases them to meet demand from institutions. The U.S. Securities and Exchange Commission (SEC) took issue with this arrangement and sued Ripple in 2020. The agency argued that XRP should be classified as a financial security just like a stock, bond, or any other financial instrument issued by a company.
This could have derailed Ripple's business model by forcing the company to operate under strict regulations. Fortunately, a judge issued a ruling mostly in favor of Ripple in August 2024, and in August 2025, the SEC agreed to drop all pending appeals, which effectively ended the five-year legal battle. The recent decision was part of the Trump administration's pro-crypto agenda, which aims to foster innovation in this sector.
Why XRP's latest rally is stalling
Despite hitting a seven-year high in the lead-up to the SEC settlement, XRP struggled to maintain its momentum, and its recent downside might be a sign of things to come.
Banks actually don't have to use XRP to benefit from instant cross-border transactions through Ripple Payments, because the network also supports the use of fiat currency. That means even if the network continues to grow, it won't necessarily fuel demand for XRP, which could limit further upside.
Plus, Ripple launched its own stablecoin, called RippleUSD, last year, which is much better suited for payments because it offers practically zero volatility. The value of XRP can swing violently from day to day, exposing banks to sharp losses even during very brief holding periods.
A $5 price might be a tall order for XRP in 2026
At the current price of $2.10 per token, XRP has a fully diluted market capitalization of $210 billion. If it were to rise to $5, its market cap would climb to $500 billion, making it the world's second most-valuable cryptocurrency behind Bitcoin, which has a market cap of $1.8 trillion. In other words, $5 per token isn't necessarily unrealistic.
However, it's unclear whether there is a catalyst capable of driving XRP to that milestone, especially if it becomes progressively less relevant as a payment mechanism. During the past 12 months, the number of daily active addresses (unique users) on the XRP Ledger has plunged. There were just 5,980 active addresses as of the most recent data on Dec. 3, down significantly from a peak of more than 105,000 addresses last December.
XRP lost over 90% of its value within 12 months of hitting its all-time high in 2018, and that was long before the SEC formally cracked down on Ripple's practices. Another decline of that magnitude isn't out of the question considering the token is already down more than 40% from its most recent record high.
As a result, I wouldn't bank on XRP hitting $5 in 2026. If anything, it could be heading much lower from here.
