Real-world applications are anticipated to significantly influence the price of XRP in the upcoming market cycle, presenting a promising outlook for the cryptocurrency. Ripple, one of the early innovators based on the foundations laid by Bitcoin, has focused on utilizing blockchain technology to facilitate faster and more cost-effective cross-border transactions rather than solely creating a digital currency.
Despite facing substantial challenges since its inception, including a lengthy legal battle with the SEC that began in late 2020, XRP has recently experienced a dramatic price surge. Following a court ruling that clarified the legal standing of XRP, the cryptocurrency has seen an increase of approximately 340% since last year’s election, buoyed by a more favorable regulatory environment.
The lawsuit, in which Ripple was accused of selling XRP as an unregistered security, concluded with the court determining that only sales to institutional investors violated securities laws. This ruling has lifted a significant burden from Ripple, allowing it to operate with greater clarity. The administration’s recent initiatives have also created a more accommodating framework for cryptocurrency, such as the passing of the GENIUS Act, which establishes regulatory guidelines for stablecoins, and the removal of restrictions on commercial banks developing digital asset custody services.
Moreover, the current SEC has demonstrated a willingness to engage with the cryptocurrency market more constructively. Chairman Paul Atkins aims to establish clearer guidelines to define whether a crypto asset is classified as a security, which could prevent drawn-out legal disputes like Ripple’s. This proactive approach is expected to foster an environment conducive to institutional adoption.
Despite the limitations on Ripple selling XRP directly to institutional investors, these parties can still acquire it on the open market. Recent SEC policy changes, including the approval of new exchange-traded funds (ETFs) tracking the spot prices of cryptocurrencies like XRP, are set to facilitate this process. Currently, the SEC is evaluating applications for XRP ETFs from seven institutions, with approvals expected by mid-November. The launch of these ETFs is anticipated to stimulate greater interest and adoption among institutional investors, alongside the significant trading volume observed in XRP futures contracts since their introduction by the CME Group.
XRP distinguishes itself from Bitcoin by actively engaging in the development of financial technology with tangible use cases. RippleNet, its payment system, aims to challenge the traditional SWIFT network, which often involves numerous intermediaries that can increase transaction costs and time. In contrast, RippleNet leverages its own blockchain to confirm transactions almost instantly, utilizing XRP as a bridge currency through its On-Demand Liquidity feature.
As transaction volumes on RippleNet grow, the market capitalization of XRP is expected to rise accordingly. Several financial institutions, including Santander, PNC, and American Express, have begun testing RippleNet, further validating its potential for widespread adoption.
Beyond its core utility in international transfers, the XRP ledger also supports other innovative use cases, such as the tokenization of real-world assets and the settlement of Ripple’s RLUSD stablecoin transactions. Ripple’s ventures into decentralized finance pose additional upside for the XRP ecosystem.
The price trajectory of XRP is closely tied to the usage of RippleNet and the adoption of its financial solutions. With the regulatory clouds clearing and ongoing governmental support for blockchain technologies, there is optimism that XRP could see substantial appreciation, possibly exceeding $10 by 2029 as the next market cycle unfolds. However, this outcome hinges on broad adoption by both financial institutions and individual investors—an uncertain yet enticing prospect that warrants consideration, especially for those with an appetite for risk within the cryptocurrency space.
