Is It Too Late to Buy XRP?

Is it too late to buy XRP (CRYPTO: XRP)? Not exactly. But "not too late" isn't the same thing as "a good idea."

XRP is in an awkward spot.

The company behind it, Ripple, is doing great: billion-dollar acquisitions, a $50 billion valuation, and partnerships with the kinds of institutions that have marble lobbies in Zurich and Singapore. The SEC lawsuit is finally over. There are actual spot-price XRP exchange-traded funds (ETFs) now. By many measures, Ripple has never been healthier.

But XRP, the token that was supposed to ride that success, is down 60% from last year's highs. It looks a bit lost.

XRP isn't going to zero, of course. Ripple is thriving. The XRP Ledger hosts $428 million in tokenized real-world assets, up from $117 million a year ago. Together, these data points should, in theory, drive XRP's price higher.

The original investment thesis for XRP was straightforward: As banks adopt Ripple's cross-border payment technology, demand for XRP rises. The token serves as a bridge currency, eliminating the need for pre-funded accounts in foreign markets. And the successful RippleNet international payment service won't work without it.

Or at least, that used to be the big idea.

Ripple is thriving. XRP isn't joining the party.

The real world is telling a different story nowadays. XRP faces strong competitors, including a stablecoin launched by Ripple itself.

The Ripple USD (CRYPTO: RLUSD) coin can serve many of XRP's long-established roles, but without the volatility. Banks, it turns out, aren't thrilled about holding an asset that might drop 5% while their transaction clears.

RLUSD doesn't have that problem. It's been quietly eating XRP's lunch since it launched in December 2024. Its all-time high is $1.02 per coin, and the record low is $0.991. You can't get much more stable than that. XRP fell more than 40% over the same period.

Meanwhile, the supply picture isn't helping. Ripple unlocks 1 billion XRP every month from escrow, with roughly 38 billion tokens still locked and 62 billion tokens in circulation. That's years of selling pressure ahead. Transaction fees on the XRP Ledger are burned, but the cumulative burn since inception amounts to just 0.014% of the total supply.

And the competition isn't sitting still. SWIFT, the interbank messaging network Ripple was supposed to replace, is modernizing instead of dying. Wise (NASDAQ: WSE) just showed up on the Nasdaq exchange, processing a quarter-trillion dollars a year in cross-border payments using nothing fancier than a network of bank accounts -- with regulatory approvals in dozens of countries.

XRP's "inevitable disruption" narrative has gotten a lot less inevitable.

Image source: The Motley Fool.

What XRP investors are buying now

So, is it too late to buy XRP? Not really. But the trade has changed.

XRP could still find a second wind. The XRP ETF inflows are real, with more than $300 million of XRP assets under management in the Canary XRP ETF (NASDAQ: XRPC) and nearly $400 million in the Bitwise XRP (NYSEMKT: XRP) fund.

But the old thesis, that Ripple's growth would lift XRP along with it, has sprung some leaks.

You can still buy XRP. Just know what you're buying. What was once a bet on utility is now a bet on sentiment. That's not necessarily a bad trade, but it's a different one, and investors should understand which one they're making.

Anders Bylund has positions in XRP. The Motley Fool has positions in and recommends Wise Plc and XRP. The Motley Fool recommends Nasdaq and Wise Group plc. The Motley Fool has a disclosure policy.