Is XRP Headed to $1?

Less than two months into 2026, growth investors have been hard-pressed on where to make money. Certain pockets of the artificial intelligence (AI) realm, such as software stocks, are getting clobbered while speculative opportunities in cryptocurrency are plummeting.

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So far this year, XRP (CRYPTO: XRP) has cratered by 25%. Could XRP's sell-off be an opportunity to buy the dip, or is the token headed even further south?

Why is crypto crashing?

One of the interesting aspects about the current crypto winter is that it's taking a toll on both major assets like Bitcoin and Ethereum as well as smaller, less-established altcoins like XRP.

A major contributor to the crypto sell-off is liquidity rotation. The AI opportunity has become a bellwether for the technology, energy, and infrastructure industries. As such, many investors are opting for the upside potential of the multi-trillion dollar, multi-year AI infrastructure supercycle over more volatile opportunities in the crypto arena.

From a macro perspective, another headwind for cryptocurrency investors is rising geopolitical tensions and uncertainties around the Federal Reserve's monetary policy decisions. Instead of holding onto digital assets, investors are beginning to flock to other alternative assets -- particularly safe havens such as gold.

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After cratering 25%, will XRP go back up?

As of this writing (Feb. 11), XRP trades at a price of $1.35 -- equating to a market capitalization of $82 billion.

XRP's issuer, Ripple, has done a respectable job of integrating the token into its payments network. Indeed, XRP has proven it can challenge incumbent solutions such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in the cross-border transactions market.

Here's the problem: During periods of macroeconomic uncertainty, the idea of real-world utility -- which XRP has achieved -- can be overshadowed by broader liquidity flows. From an investment perspective, this means that the opportunity cost of holding onto a volatile, unpredictable asset can reach a breaking point -- ultimately fueling outsize selling pressure as capital rotates into more durable, resilient vehicles.

Should XRP's price continue to slide, it would suggest that the hype around the token's product-market fit is insufficient to sustain a premium valuation. Instead, it looks as if investors are beginning to value XRP more like an actual fintech company -- demanding consistent, measurable growth around market share progress and real-world adoption.

Given these dynamics, I think XRP's chances of commanding a premium are rapidly diminishing. This isn't to say that XRP will never experience robust price appreciation again. Rather, I think the most likely outcome is that XRP's price will continue to normalize in the near term. Another way of saying it is that XRP's price could very well continue to drop throughout the year.

By the end of 2026, I think XRP could be trading for $1 or even lower. At that point, it could make sense to buy the dip so long as you treat a position in XRP like a utility or infrastructure play, rather than a speculative token you're hoping to turn into a multibagger.

Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.