3 Parts of XRP's Thesis Aren't Working. Should You Sell It?

Something uncomfortable is happening under the hood of XRP (CRYPTO: XRP). Compared to a year ago, the daily active accounts on the XRP Ledger (XRPL) have been sliding, the volume of payments moving between wallets is declining, and the amount of XRP burned keeps shrinking. For investors who bought XRP because they believed it would become a widely used bridge currency, a retail payments rail, or an increasingly scarcer coin through fee burns, these trends point in the wrong direction, and they suggest that those elements of the coin's investment thesis aren't working as intended.

Does that mean you should sell your XRP?

Image source: Getty Images.

Three pillars, three cracks

The classic investment thesis for XRP leaned on three pillars: its adoption as a cross-border bridge currency, its growing organic usage driving demand, and its supply diminishing over time as XRP is permanently destroyed through the payment of the fees associated with each transaction on the network. All three of those pillars are deteriorating.

Average daily active wallet addresses peaked at a hair over 49,000 in July 2025, and they're now down to under 16,000. The daily number of payments from one wallet to another was a bit over 1 million on April 8, 2025, and 12 months later, it's at just 748,430. And whereas 2,663 XRP were burned a year ago on that same day, on that day this year a scant 455 XRP was burned due to network activity.

So the XRP ledger probably isn't seeing increased adoption among users looking to transfer money across international boundaries, and the coin itself simply isn't in a state of increasing demand to cover transaction costs.

For what it's worth, the last 12 months have been especially tough for the blockchain, as its price fell for much of that period. Zooming out to look at the same data over the last three years, however, paints a more positive picture.

The scorecard is what changed the most

If you're a holder, you'll be relieved to hear that the XRPL's trajectory has shifted in ways that make the public metrics described above into a poorer proxy for progress than they were in the past.

For example, in February, the XRPL activated a permissioned decentralized exchange (DEX) for regulated financial institutions. That DEX is essentially a members-only trading floor where banks can trade with each other, supported by built-in know-your-customer (KYC) and anti-money-laundering (AML) compliance.

Those transactions don't appear in the data sets discussed earlier, and it's plausible that the steep declines in those metrics could partially reflect institutional activity migrating to private channels rather than vanishing.

Furthermore, real-world asset (RWA) tokenization -- the process of tracking ownership of bonds, funds, and other assets on a blockchain for faster processing -- is where the XRPL's pivot becomes concrete. The XRPL now hosts over $470 million in tradeable tokenized assets, whereas in April 2025 it had just $116 million. The future of cryptocurrency may increasingly look like this kind of institutional plumbing, and XRPL is at the leading edge of the trend, so it's likely to attract more capital.

On the note of financial institutions, it's also important to recognize that they do not need thousands of crypto wallets to park and manage many billions of tokenized assets. The cheapness and speed of transactions on the XRPL is part of what attracts them. As long as Ripple, XRP's issuer, continues to develop its network to have more capabilities for institutional capital, the XRPL will likely continue to onboard that capital, even if it ends up living mostly inside the walled gardens of its DEXes.

Don't panic, but don't relax

Still, the big question is now how having more capital and more features on the XRPL will translate into returns for its holders. Daily coin burns are now dramatically lower than before, when it would have taken a very, very large amount of consistent daily burning to create a meaningful positive impact on the coin's price. But a core part of the coin's narrative is starting to look a bit broken, even when considering its promising new directions.

Don't sell your XRP just yet. There's a lot Ripple can do, and is actually doing, to increase its value. Just be aware that, until something changes about this coin's economics, XRP is growing riskier over time, and it wasn't a very safe investment to begin with.

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.