Should You Buy XRP While It's Under $3?

It's deja vu all over again for XRP (CRYPTO: XRP). Just like in 2025, XRP is off to a blazing fast start in 2026. It's only been a week, and XRP is already up 13% for the year.

There's good reason to think XRP, which is currently trading around the $2 mark, could soar all the way past the $3 mark by the end of the year. Here's why.

It's all about the ETFs

A major factor in XRP's favor has been the launch of the new spot XRP exchange-traded funds (ETFs). Since their launch in mid-November, they have attracted more than $1 billion from investors.

Much of that buying has come from institutional investors looking to diversify their crypto holdings beyond just Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH). This steady buying of XRP by deep-pocketed institutional investors is almost guaranteed to boost its price for the foreseeable future.

Image source: Getty Images.

All the more so, given that the supply of XRP on top cryptocurrency exchanges is running at multi-year lows. Therefore, any boost in demand for XRP coming from institutional investors is likely to have an even greater impact on price.

Regulatory certainty and a new look for Ripple

And that's not all. Ripple, the company behind the XRP token, finally settled its long-running case with the Securities and Exchange Commission back in August, and is now free to start building out the blockchain infrastructure for XRP once again. That's a huge factor, given that Ripple's plans for the U.S. market have largely been on hold for the past five years.

Last year, Ripple spent nearly $2.5 billion on new blockchain acquisitions, and is working hard to build out new use cases for the XRP coin. On top of that, Ripple raised more than $500 million from investors at the end of 2025, securing a $40 billion valuation in the process.

That $500 million in financing gave Ripple a huge war chest headed into 2026. As a result, I'm fully expecting new products, new initiatives, and new partnerships to be announced throughout the year. The best time to get ahead of these developments is now, when many investors still have not woken up to the true long-term potential of XRP.

New crypto market legislation

This year is also likely to see the launch of comprehensive new crypto legislation known as the Digital Asset Market Clarity Act (or "Clarity Act," for short). This is designed to be a follow-up piece of legislation to the groundbreaking Genius Act signed into law last summer. It will clearly spell out what market participants can and can't do with crypto.

There's definitely a pro-crypto outlook within the Trump administration, and it's likely that this new crypto legislation will open the floodgates for new crypto projects in the traditional financial sector. That means new opportunities for Ripple (XRP), as well as new ways to create value for XRP by partnering with big Wall Street firms.

Investors have seen this story before with XRP

Just keep in mind: XRP has continually disappointed investors. Consider what happened last year. In the period from November 2024 to January 2025, XRP skyrocketed from a price of $0.50 to a price of $3.40, for an amazing 580% gain in a matter of weeks. But throughout the year, XRP gave up all those gains, finishing the year around the $2 mark.

So if you're thinking of investing in XRP right now, keep your expectations in check. There's a lot to be excited about right now, but it's still unclear if XRP can maintain this new momentum throughout 2026.

Still, I'm looking to buy XRP while it's under $3. It's simply one of the best high-upside cryptocurrencies to get behind right now.

Dominic Basulto has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.