The XRP (XRP 1.77%) cryptocurrency soared to $3.65 per token last July, marking the highest price since 2018. Investors were bullish because its parent company, Ripple, finally settled a five-year legal battle with the U.S. Securities and Exchange Commission (SEC).
The SEC sued Ripple in 2020, alleging that the company breached financial securities laws. The potential repercussions threatened to derail its business model, which suppressed the price of XRP. Last year's settlement came as part of President Donald Trump's pro-crypto agenda, which cuts red tape to encourage innovation across the industry.
But despite XRP's initial positive reaction, it has since plunged by almost 50% from its July peak. Unfortunately, the legal settlement doesn't solve some of the token's core structural issues, which could limit further upside from here. Here's where I predict the token will trade at the end of 2026.
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XRP has a real use case, but there's a catch
Ripple created a payments network called Ripple Payments, which lets banks send money around the world practically instantly by cutting out the need for intermediaries. In addition to increasing transaction speeds, it can significantly reduce costs.
If a U.S. bank wants to send money to a European bank, it would typically send dollars, which the receiving bank would convert into euros. This exchange can incur fees of as much as 4.85% of the transaction value. However, Ripple created XRP as a bridge currency that banks can send to one another through Ripple Payments. Each XRP transfer often incurs a fee of just 0.00001 coins (a fraction of one U.S. cent), so it's substantially cheaper.
In theory, the demand for XRP should increase as more banks use Ripple Payments, thus boosting its value. But there are a few problems. First, banks don't have to use XRP to benefit from instant transfers through Ripple Payments, because the network also supports the use of fiat currencies. Therefore, the relationship between Ripple Payments adoption and XRP's value isn't totally reliable.
Second, bridge currencies are rarely held for long by their users. In my example above, the receiving European bank would almost immediately convert its XRP into euros so it can carry on with its business. Therefore, while the U.S. bank was a buyer of XRP, the European bank was an equal seller, meaning no real demand was created.
Third, Ripple launched a dollar-backed stablecoin in late 2024 called Ripple USD (RLUSD 0.03%), which might be better suited as a bridge currency because it offers practically zero volatility. The value of XRP, on the other hand, can fluctuate significantly from day to day, exposing banks to losses even during brief holding periods.
History suggests more downside is on the way in 2026
These factors partly explain why XRP is down so much from its recent high, and they're likely to continue pressuring its value. As a result, I think the token will continue to suffer losses as this year progresses.
CRYPTO: XRP
Key Data Points
After XRP set its record high in 2018, it lost more than 90% of its value in a matter of just six months. Ripple Payments is much larger today than it was back then, and the cryptocurrency industry overall has a much broader support base, so a decline of that magnitude might not happen as quickly this time around.
Setting aside XRP's structural issues, the token has also faced pressure recently because investors have trimmed their total exposure to cryptocurrencies, with even the largest coins like Bitcoin suffering losses during the past year. Since we have established that XRP's main source of demand (Ripple Payments) isn't very reliable, we have to acknowledge that speculative investors will play a big role in determining its value from here.
That means that during difficult periods for the crypto markets, XRP is likely to suffer extreme volatility culminating in very sharp declines.
Although XRP's peak-to-trough decline might not be as severe as 90% in the near future, I think more downside is likely. Since it's already down by almost half during the past seven months, I think a further 50% fall is within the realm of possibility during 2026, resulting in a price per token of about $1 by the end of this year.
