1 Big New Catalyst For XRP That's a Reason to Buy It in 2025 and Beyond

Most investors are more comfortable buying assets from their brokerage or retirement accounts than they are juggling crypto wallets in browser extensions. So when an asset finally becomes available to purchase using the accounts people already use, new money tends to find its way in.

That's what just changed for XRP (CRYPTO: XRP) with the launch of the Canary XRP ETF (NASDAQ: XRPC) on Nov. 13. In short, investors in the U.S. can now get exposure to XRP by buying an exchange-traded fund (ETF), instead of needing to self-custody crypto tokens. This is a big new catalyst for the coin, so let's take a look at how it will shape XRP's prospects in 2025 and beyond.

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There's a new funnel for demand now

Before XRPC existed, owning XRP usually meant opening a crypto trading account on a crypto exchange, wiring in cash, buying XRP, and learning the basics of self-custody along the way. A spot ETF sidesteps that problem by holding the asset directly on investors' behalf, and issuing ETF shares that track its price in U.S. dollars, so it can sit next to your index funds and other traditional financial equity investments.

On XRPC's first trading day, investors bought roughly $245 million worth of shares, and trading volume reached about $58 million. There was real, bottled-up demand for XRP that was waiting on an ETF, and that demand is now in the process of procuring its desired portion of the coin's supply. In other words, the new ETF has already been quite successful, catalyzing hundreds of millions of dollars in inflows to the underlying asset's value.

The ETF is important because financial advisors and financial institutions that are restricted from steering clients to crypto exchanges can now point them to a listed security instead. Similarly, institutions that prefer holding securities to tokens for regulatory compliance reasons now have a path to add XRP exposure.

Meanwhile, the fund itself must hold real XRP in custody, allowing holders to redeem their coins for shares if they choose. Any net inflows force the sponsor to buy coins on the market and move them into cold storage, thereby slowly shrinking the liquid supply that trades on exchanges and elsewhere. On a sufficiently long time horizon, this should support the coin's price and send it substantially higher.

The ETF will not determine XRP's future on its own, nor is it likely to be the last spot XRP ETF to get approved. However, it provides the asset with a new, durable channel for capital that did not exist a few weeks ago, which is exciting.

How this fits into the long-term story

The new ETF is a new reason to consider buying XRP, because it increases the coin's integration with the traditional financial system.

Ripple, the issuer of XRP, aims to transform the coin and its blockchain into a suite of financial tools that enable financial institutions to transfer and manage value efficiently, with built-in regulatory compliance features. The ETF thus enables the XRP Ledger (XRPL) and its ecosystem to significantly scale its capital base, which is bullish. The ledger is also being positioned as infrastructure for stablecoins and tokenized real-world assets (RWAs), which are assets such as bonds or currencies that are issued as tokens, allowing them to be moved and settled on-chain. The investment thesis for buying XRP (or XRPC) follows from that strategy.

If XRPL continues to win mandates for cross-border payments, stablecoins, and tokenized assets, activity on the ledger is expected to rise, and so will demand for XRP to pay fees and serve as a reserve. In parallel, more institutions will want economic exposure to XRP because it'll be part of the plumbing they rely on.

The new ETF serves as a bridge from the institutional world and mainstream investors into XRP, making it easier for portfolios to reflect the network's growing importance if that story unfolds. As capital flows in via the ETF and other routes, it'll make the chain a more attractive place for large financial players to transact in the larger sizes they need to achieve their business goals.

So, for investors who already have a diversified portfolio and want some exposure to crypto, there's now one more reason to buy XRP instead of a competitor. Now that there's an ETF, it's easier than ever before to do that by buying XRPC. But buying and holding XRP itself is still a good option for getting exposure too, if you're willing to deal with a little hassle.

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.