3 Brand-New Reasons to Buy $1,000 of XRP and Hold It for 3 Years or More

XRP (CRYPTO: XRP) is suddenly putting up some important numbers that suggest it's finally getting pulled into the institutional financial orbit that its issuer, Ripple, has been targeting for years.

Over the last 30 days, the XRP Ledger's (XRPL's) base of real-world assets is moving sharply higher, which creates three reasons long-term investors might want to invest $1,000 in XRP. Let's examine them one by one.

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1. Managed asset value is rising fast

Before we jump in, let's quickly review a pair of key concepts. Tokenized real-world assets (RWAs) are traditional financial assets like U.S. Treasury bills and bonds, money market funds, commodities, and stocks that are "tokenized," meaning their ownership claims are represented by tokens on a blockchain. In theory, that can make holding, managing, and transferring them faster, cheaper, and more programmable, and all while still keeping the issuer's stringent regulatory compliance rules intact.

When it comes to quantifying those RWAs, there are two kinds. One kind are "represented" assets, which use a blockchain as a database. The other kind, "distributed" assets, are far more interesting, as they denote assets which can actually be transferred using a blockchain in addition to having their properties tracked via a chain's database-like functions.

And over the last 30 days, the XRP Ledger's represented real-world asset value rose to reach about $1.4 billion, up roughly 265%. Distributed assets are also up by 8%, reaching $303 million.

Still, represented growth can be a leading indicator that issuers and platforms are getting comfortable using the ledger for regulated financial instruments. And that's a brand new reason to buy the coin, as the transaction fees on the XRP Ledger are paid in XRP, and accounts also need to hold an XRP reserve to exist on the ledger at all.

2. Stablecoins are growing too

Another reason to buy XRP is that its stablecoin base is growing rapidly, as is their utilization. The chain's stablecoin market cap rose by 18% over the last 30 days, reaching $416 million, and the total stablecoin transfer volume climbed by 45% in the same period.

Those are a pair of unambiguous signals that more people and institutions are using the ledger for routine transactions and trade settlement, as well as for liquidity movements, which are exactly the kinds of use cases that tend to repeat over time. Furthermore, a larger volume of stablecoins in circulation indicates that Ripple's RLUSD stablecoin, the most dominant on the network, is gaining solid adoption among users.

3. Network effects are on the verge of taking off

The most interesting part of the XRPL's recent tokenized real-world asset data might be its breadth. Over the last 30 days, the number of unique RWA holders rose by about 69%, reaching a total of 22 organizations.

That figure might seem small, but it's important to remember that RWAs are typically regulated financial products that are rarely available to any type of investor. So given that each of those holders is almost certainly a financial institution or a financial business, there's now a small but quickly growing community that's actually using the XRPL to transact with each other and manage their assets.

Each new holder tends to bring operational follow-ons to the chain, such as more accounts and more routine transactions as assets are issued, managed, and eventually redeemed. They also tend to bring about new business needs that require addressing on the chain, which in turn seeds opportunities for new players to enter the scene to offer solutions that they can charge for. Thus, a nucleus of a real-world asset ecosystem on the XRPL may now be emerging.

And all of this is very bullish, which is why it's another reason to buy and hold the coin, even if you're only willing to invest $1,000.

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.