Since hitting a high of nearly $3.65 last July, the cryptocurrency XRP has fallen more than 60% in total. It is now trading at around $1.30, roughly the same level as before the U.S. Securities and Exchange Commission (SEC) reached a settlement with Ripple and before spot XRP ETFs such as the Bitwise XRP ETF were launched in the United States.
For years, two major catalysts that bulls had been waiting for have already materialized, yet XRP’s price has returned to where it started. Some analysts believe that XRP’s trajectory is unlikely to improve in the short term, and that over the next five years, the token will struggle to keep pace with the broader cryptocurrency market.
This does not mean that bank adoption of Ripple’s technology will slow down, nor does it imply that Ripple as a company will face difficulties. In fact, analysts point out that Ripple’s success is not the same as XRP’s success, even though many people hold that view. As investors gradually come to realize this, market enthusiasm may fade.
Ripple has two core business lines. One is a settlement messaging system used primarily by large banks and financial institutions, which does not involve XRP itself, as banks prefer to avoid managing such a highly volatile asset. The other business line, used mainly by smaller institutions, typically leverages XRP to facilitate cross-border transactions: users can convert dollars to XRP, and then into the currency of the destination country. Global bank partnerships are a key component of this system.
The reality is that the former handles a much higher volume of transactions than the latter, and the latter’s scale is not yet sufficient to have a material impact on XRP’s value.
This landscape existed before Ripple’s recent strategic shift. The company is now aggressively promoting its stablecoin RLUSD as a core part of its product portfolio. RLUSD can play the same role as XRP in cross-border transactions. This means banks now have a choice of which “bridge asset” to use, and for institutions that prioritize stability, that choice is not difficult.
This is a deliberate strategic move by Ripple to seize the opportunity presented by the booming stablecoin market and to avoid being marginalized within a single XRP ecosystem. Ripple’s official payments page now prominently features “Integrate stablecoin payments into your business.” Either way, Ripple stands to win, but XRP holders may not.
Five years from now, Ripple could become a stronger, larger payment company with significantly higher adoption of its technology. However, even if that happens, and even if its products truly transform cross-border banking transactions, XRP holders may still struggle to benefit. Analysts believe XRP appears to be heading toward a less-than-optimistic future.
Summary: Taken together, XRP faces two major structural challenges. First, the connection between Ripple’s core business growth and the value of the XRP token is weak. Second, Ripple’s own RLUSD stablecoin may replace XRP’s role as a bridge asset in cross-border payments. Although Ripple as a company is expected to expand its business over the next five years, XRP token holders may not share in that growth, and XRP’s relative position in the crypto market may remain under sustained pressure.
