Assessing XRP’s Current Investment Viability Amid Market Shifts

Key Considerations

• Investors often fixate on price alone.

• A more constructive analysis examines the fundamental value drivers of an asset.

• For XRP holders, exposure to those key drivers is indirect at best.

Currently trading at $1.37, XRP (CRYPTO: XRP) has declined approximately 62% from its peak near $3.65 in 2025. With a market capitalization of roughly $84 billion, this valuation is reasonable for a cryptocurrency with established institutional partnerships and an operational payments network, and should not deter consideration on price alone.

The critical issue is the nature of the investment. Ripple, the company behind XRP, has built a network of over 300 financial institutions using RippleNet and the XRP Ledger (XRPL). However, the causal link between this network’s growth and direct returns for XRP holders is tenuous. Let’s examine why.

Image source: Getty Images.

A Disconnect Between Network Success and Coin Returns

While hundreds of banks on RippleNet suggest a positive outlook for XRP, only about 40% of these institutions actively use XRP for settlement via Ripple’s On-Demand Liquidity (ODL) service, which employs XRP as a bridge currency.

Within ODL, XRP is held for mere seconds per transaction before conversion to the destination currency. This creates efficiency for users but generates negligible sustained buying pressure or price support.

Furthermore, Ripple’s new stablecoin, RLUSD, now functions alongside XRP in Ripple Payments. Stablecoins like RLUSD, which maintain a steady value, may become the preferred settlement method for banks, as they avoid the volatility inherent in assets like XRP. Consequently, RippleNet and RLUSD can thrive without necessarily driving demand for XRP.

In essence, Ripple’s corporate success can occur independently of value accrual to the XRP token itself.

The Price Could Rise Regardless

Despite these fundamental concerns, XRP’s price may appreciate over time due to other factors.

Spot exchange-traded funds (ETFs) holding XRP have attracted approximately $1.4 billion since their November 2025 launch. Ripple also controls a significant reserve of around 40 billion XRP in escrow, giving it strong incentives and tools—such as partnership announcements, technical upgrades, and supply management—to support the coin’s price. Additionally, XRP boasts one of the largest, most patient, and enthusiastic holder communities in the crypto sector.

Therefore, at $1.37, XRP is not necessarily overvalued. Existing holders have no pressing reason to sell. For new investors, however, allocating fresh capital requires a bet that Ripple will modify the protocol to make the coin more intrinsically valuable to hold—a move for which there is currently no concrete evidence.

The Motley Fool recommends XRP and has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Source link