The cryptocurrency market is currently experiencing a bearish trend, with Bitcoin (BTC-USD) notably down over 30% from its recent all-time high achieved just a month and a half ago. This downturn has impacted various altcoins, including XRP (XRP-USD), which has plunged 42% from its peak in July, now trading at approximately $2.05.
While some investors contemplate entering the market, Anthony Di Pizio warns potential XRP investors to reconsider. Unlike many cryptocurrencies that lack real-world utility and rely heavily on market speculation, XRP was designed as a bridge currency for the Ripple payments network—facilitating quick and inexpensive international money transfers for banks.
XRP recently experienced some relief when major regulatory hurdles were eased. Ripple’s five-year battle with the SEC over accusations of violating securities laws came to a conclusion earlier this year. This legal resolution has lifted a significant weight off XRP’s price, coinciding with a generally more favorable regulatory environment, which includes recent approvals of spot XRP ETFs that may attract institutional investment.
Despite these encouraging developments, Di Pizio remains skeptical about XRP’s future. He points out that Ripple’s payments system does not mandate the use of XRP, as it already accommodates fiat currencies. Additionally, the introduction of Ripple USD (RLUSD), a stablecoin with minimal volatility, could further overshadow XRP’s role in payments. The inherent volatility of XRP presents risks for banks, who might incur unexpected losses during short holding periods.
Di Pizio also believes that the anticipated impact of ETF approvals on XRP will be less significant compared to Bitcoin. While Bitcoin benefits from being recognized as a store of value—bolstered by its decentralized structure and capped supply of 21 million coins—XRP lacks these attributes. This intrinsic scarcity and the adoption of Bitcoin ETFs have simplified institutional exposure, reducing concerns over security vulnerabilities that digital wallets present. Conversely, XRP’s absence of decentralization and fixed supply means it is less likely to gain a similar influx of demand.
In Di Pizio’s assessment, if Ripple’s payment network does not catalyze demand for XRP and the market fails to recognize it as a viable store of value, the token’s price may continue to struggle. Reflecting on the sharp decline seen in 2018, when XRP lost over 95% of its value after its peak, he predicts a similar fate may be imminent. He foresees that, in five years, XRP could settle below $1 per token if these trends persist.
Investors are advised to conduct their own analysis before proceeding, given the uncertainties inherent in the crypto market. As always, vigilance and thorough research remain crucial for anyone considering investment in this volatile landscape.
