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Updated: Jul 25, 2023, 2:19pm
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Love it or loathe it, XRP has cemented itself as a prominent player in the crypto market. Ranked fifth by market capitalisation, XRP has held a spot among the top ranking cryptocurrencies for almost 13 years.
Created by Ripple Labs, XRP is more than just a cryptocurrency—it’s an ambitious project aimed at transforming how money is transferred worldwide. Ripple’s vision is to provide an efficient and cost-effective alternative to the existing SWIFT banking system. Using XRP, Ripple aims to enable faster, low-cost international transactions, making money transfers as easy as sending an email.
As cryptocurrency was created to move away from financial middlemen—such as banks—XRP has been an extremely divisive project over the years. The project is known for its cult-like following, ready to silence naysayers at the drop of a hat.
To provide a balanced opinion on the project, we’ve sought the expertise of Grzegorz Drozdz, a market analyst at Conotoxia, to explore the past, present and future of XRP.
To better understand the potential of a project, it can be helpful to look to the past for trends and indicators that can offer guidance. Incredible highs, steep falls, and long periods of steady decline mark XRP’s journey so far.
The project launched its token in 2013 but saw little significant price action until the bull run of 2017. However, after this period, listings on popular exchanges became pivotal to the coin’s considerable price rises.
“The history of XRP cryptocurrency listings begins in 2018, a pivotal year for Ripple (the company behind XRP),” Drozdz tells us. Ripple’s launch of the xRapid product was a defining moment, ushering in a new era where XRP cryptocurrency aimed to revolutionise money transfer, including within the banking system. The response from the market was nothing short of phenomenal.
“Within a very short time, the price of XRP skyrocketed by as much as 1820%,” Drozdz elaborates. From a humble US$0.2, XRP soared to US$3.84, an all-time high that naturally thrilled investors. However, as Drozdz notes, this jubilation was short-lived. “The cryptocurrency then fell by 93% in a matter of months, leaving a stark reminder of the volatile nature of the crypto world.”
But XRP wasn’t finished. In 2021, as the entire cryptocurrency market was caught in a bull market frenzy, XRP again provided significant returns to investors who got in at the right time. Drozdz recounts: “Within six months, the cryptocurrency had increased by an impressive 710% to US$1.96” Yet the following period was a steady downward trend, as XRP’s value gradually declined to US$0.3.
In the recent past, XRP’s price has shown signs of recovery. News of a favourable court ruling has ignited the market, sending the value of XRP shooting up by more than 80% overnight to US$0.80. Drozdz underscores the importance of these shifts: “Such movements are a testament to the reactive nature of cryptocurrency markets. News, whether good or bad, can significantly sway investor sentiment and, by extension, the price of the currency.”
Indeed, the history of XRP’s price serves as a window into the volatile, dynamic, and often unpredictable world of cryptocurrencies. As Drozdz points out, the past may not necessarily predict the future, but it can offer valuable insights to help guide investment decisions.
Related: Bitcoin Price Prediction
Many investors are wondering about the future after the recent news from the SEC case, in which the court ruled that the sale of Ripple’s XRP tokens on exchanges and through algorithms did not constitute investment contracts, while the institutional sale of the tokens did violate federal securities laws. What does 2023 hold for this cryptocurrency? As with any attempt at predicting the future, the answer isn’t all that clear.
“The partial resolution of the dispute with the US Securities and Exchange Commission (SEC) could potentially spur growth for XRP in the near future,” explains Drozdz. This legal battle has been a significant factor in XRP’s performance, with developments closely watched by investors and the wider crypto community.
Yet, Drozdz tempers his optimism with a note of caution. “The dispute has not yet been fully resolved,” Drozdz emphasises. “While the recent developments are certainly encouraging, we cannot be completely certain about XRP’s future trajectory.”
Understanding the correlation between legal resolutions and market performance is crucial. If the dispute with the SEC reaches a favourable final conclusion, it’s reasonable to anticipate that investor interest in XRP could spike. This would likely fuel new growth and potentially lead to an uptick in its price.
However, it’s important to remember, as Drozdz points out, that such projections are just that—projections. They offer a potential path for XRP’s performance in 2023 but do not provide a definitive guarantee. Much hinges on the outcome of the SEC dispute and how the crypto market fares in the coming months.
Forecasting the future of any cryptocurrency can be like trying to predict the weather: there are many variables at play, some predictable, others less so.
Over the years, there have been many price predictions made regarding XRP. Crypto hedge fund manager, Thomas Kralow, previously predicted that XRP would hit $30 a coin in 2023. This prediction fails to consider the mathematical improbability of XRP reaching this price, as the circulating supply of 100 billion coins means the project’s market cap would be $3 trillion dollars. That is more than double the current market cap of all cryptocurrencies combined.
To avoid the sensationalist views often provided by XRP fanatics, Drozdz provides a balanced insight into two scenarios: a bullish outlook, driven by increased popularity and positive legal outcomes, and a bearish view, potentially impacted by declining interest, token design and broader market sell-offs.
“Cryptocurrencies, in general, are driven largely by news, popularity, and in the case of XRP, court decisions,” says Drozdz. These currencies lack intrinsic value, like physical assets or cash flows. Therefore, their value largely depends on the sentiment of investors.
The recent court decision, seemingly in favour of XRP, has already created a ripple effect, pardon the pun, on its price. “This positivity around XRP is a reaction to the current court ruling, which seems to be impacting its growth,” observes Drozdz. Further favourable rulings and developments related to the ongoing litigation could continue to boost XRP’s price.
Beyond the legal realm, the general state of the cryptocurrency market can significantly impact XRP. Drozdz notes, “A large-scale upswing in the crypto world could be a boon for XRP. If other cryptocurrencies rise, XRP could well ride the wave.”
However, not all potential scenarios are rosy. The resolution of the ongoing litigation could, paradoxically, lead to a decline in XRP’s price. Drozdz explains, “Once the excitement around the lawsuit fades, we could see a drop in interest for XRP. That could, in the medium term, negatively impact its price.”
The broader market also presents possible challenges. If a significant sell-off in the cryptocurrency market occurs, this could also depress the value of XRP. “Just as XRP can benefit from a bull market, it’s susceptible to bearish trends in the wider cryptocurrency space,” Drozdz cautions.
There are also concerns about using XRP in Ripple’s cross-border payment system. The currency is largely redundant and potentially isn’t necessary for the payments system to function. Even if XRP is used to settle payments, the value of XRP does not affect the system’s functionality, as the payments are settled in fiat value. This means that whether XRP is $1 or 1 cent, the payment can still be sent as usual.
For this reason, it is easier to perceive long-term value accrual with a significant improvement to the token’s design and utility in the system.
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Investing in cryptocurrencies, including XRP, isn’t a decision to be taken lightly. As Drozdz notes, while current events suggest a positive outlook for XRP, particularly with the possibility of a new bull market in cryptocurrencies, inherent risks are involved.
“There could be an increased interest in XRP in the near future, which could drive a new uptrend,” Drozdz says. This forecast and the potential resolution of the ongoing litigation could place XRP in a favourable light for potential investors.
However, the world of cryptocurrencies is known for its wild swings and unpredictability. Drozdz adds a note of caution: “Investing in XRP is risky and may not be suitable for most investors due to the high price volatility and the difficulty in predicting future trends in the cryptocurrency market.”
This advice highlights the need for prospective investors to consider their own risk tolerance and financial goals carefully. As Drozdz reminds us, while the potential for high returns is attractive, the possibility of significant losses is real and should not be overlooked.
“Investment decisions should be made with a clear understanding of the risks involved,” Drozdz says. “For some, XRP could present an exciting opportunity. For others, it may not align with their risk appetite or investment strategy.”
However, erring on the side of caution is always recommended.
“In the world of cryptocurrency, a dash of caution is always wise. Keep a keen eye on the developments surrounding XRP and make informed decisions based on the evolving landscape.”
Essentially, whether XRP is a good investment depends mainly on an individual’s financial situation, risk tolerance, and investment goals. As always, it’s imperative to do thorough research and consider seeking advice from a financial advisor before diving into cryptocurrency of any kind.
This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency as an investment class.
Predicting the exact price of any cryptocurrency, including XRP, years into the future is challenging due to the volatility of the market and various other factors, such as regulatory developments and broader economic conditions. However, based on historical performance and market trends, it’s possible that XRP could experience growth over the next few years. Keep an eye on the news surrounding Ripple in regard to the SEC case and its ongoing developments.
Reaching a $100 price point would mean a market capitalisation of roughly $5.2 trillion for XRP, considering the current circulating supply of about 52 billion. This would be more than four times larger than the current value of all cryptocurrencies combined. While nothing is impossible in the world of cryptocurrencies, it’s important to note that such an increase would require a significant change in the overall market conditions or a major reduction in XRP’s supply.
For XRP to reach $50, the market cap is around $2.6 trillion, considering the current circulating supply. This would still be multiple times larger than the total market cap of all cryptocurrencies combined in July 2023. Therefore, while it’s theoretically possible, it would require substantial market shifts or a major supply reduction.
As with any long-term prediction, it’s hard to say with certainty what the price of XRP will be in 2030. It would depend on numerous factors, such as regulatory decisions, the overall health of the global economy, technological advances, and changes in the supply and demand of XRP.
Unless there is a significant positive outcome from the SEC case, coupled with changes to the market conditions and the uptake in usage for XRP’s cross-border payments system, it is hard to see how the currency will appreciate much beyond its current price point. It’s always advisable to stay updated with the latest news and trends in the cryptocurrency market when considering long-term investments.
Patrick McGimpsey is a freelance writer passionate about crypto and its impact on the financial world. Currently working as the content lead for Australian startup CryptoTaxCalculator, Patrick has also covered the crypto industry for Canstar and The Chainsaw. Patrick has over seven years of experience in the crypto space and has previously shared his knowledge with the AML and fraud departments of Australian financial Institutions.
