XRP (XRP 1.03%) has had a fast start to 2026, surging more than 15% right out of the gate. That's better than almost every major cryptocurrency, including Bitcoin (BTC 0.44%) and Ethereum (ETH 0.10%).
For some investors, that's a clear sign that XRP is about to go on another of its epic runs, just like it did last year. But I'd like to pour some cold water on that idea.
XRP's upside may be capped at $4
For one, XRP's all-time high is just $3.84, and that came all the way back in January 2018. Admittedly, XRP made a run at that price level last year, but it topped out at $3.65 in July. As soon as it hit that multiyear high, XRP promptly cratered in value, ending the year below the $2 mark.
CRYPTO: XRP
Key Data Points
That's what has me concerned right now. XRP's current circulating coin supply (60 billion coins) is so massive that it makes getting to the $5 mark unlikely at best. At a price of $5, XRP would have an implied market cap of $300 billion.
Image source: Getty Images.
At that level, XRP would start to approach the same market cap as Ethereum. So are we really talking about XRP "flipping" Ethereum and becoming the second-most-valuable cryptocurrency in the world?
Are ETFs enough?
The recent run-up in the price of XRP can be attributed to one primary factor: a huge surge in the amount of money flowing into the new spot XRP exchange-traded funds (ETFs). These spot ETFs launched back in November and have already attracted more than $1 billion in investor money. By all accounts, they have been a smash hit with institutional investors, who now have a much easier way to get exposure to XRP.
But think back to the same time last year, when these spot XRPs were first being discussed. At that time, the conventional wisdom was that as much as $8 billion might flow into these ETFs, driven by huge pent-up institutional demand.
Considered from this perspective, $1 billion suddenly doesn't seem as impressive. From my point of view, $1 billion is simply not enough to move the needle when it comes to XRP's price.
Beware cryptocurrencies that trade like meme stocks
At the end of the day, XRP tends to trade like a meme stock. It zigs up and down on headlines and investor sentiment, rather than any real fundamentals. It's easy to find attention-grabbing headlines -- "XRP is about to disrupt the field of cross-border payments!" -- only to find out later that they're based on a bunch of hype and buzz.
So if you're thinking about investing in XRP, be wary of the hype. Yes, XRP might once again make a run at the $4 price level. But I'm not at all convinced that there's enough fuel in the tank to take it all the way to $5.
