Is XRP Too Risky to Own -- or Too Cheap to Ignore?

For good reason, XRP (CRYPTO: XRP) has earned the reputation of being an explosive, high-upside cryptocurrency. Remember late 2024 and early 2025? In a span of mere weeks, XRP skyrocketed in price by 580%.

However, XRP has continually overpromised and underdelivered for more than a decade now. In that time period, it has never traded higher than a price of $3.84. That raises a question for investors in 2026: At a price of just $1.40, is XRP too risky to own, or too cheap to ignore?

Too cheap to ignore

There appears to be much going on in XRP's favor right now. For one, the dark regulatory clouds that hovered over it for nearly five years have finally dissipated, with Ripple (the company behind the XRP token) finally settling its case with the SEC last year.

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Secondly, XRP has become the centerpiece of a vast, end-to-end blockchain-based payment system created by Ripple. This fintech company has spent $2.7 billion on new blockchain- and crypto-related acquisitions over the past few years to make this a reality.

As more use cases emerge for XRP, it should become much more than just a bridge currency used to make cross-border payments. In fact, some analysts suggest that Ripple might be building a blockchain-based alternative to SWIFT (Society for Worldwide Interbank Financial Telecommunication), which processes more than $150 trillion in annual transaction volume.

That would seem to suggest that the sky is the limit for XRP. And, indeed, some analysts have suggested that the price for XRP might approach $10 by 2027. If so, that would represent a nearly 10x return on investment, given today's prices.

Too risky to own

But here's the thing: Many of the use cases originally planned for XRP are increasingly being taken over by stablecoins, which are digital currencies pegged 1:1 to the U.S. dollar. If you think about this, it makes sense. Stablecoins always trade for $1, while XRP tends to zigzag wildly in price. If you're sending money around the world while trying to manage your overall liquidity, wouldn't you rather work with stablecoins?

With that in mind, Ripple launched a dollar-pegged stablecoin called Ripple USD (CRYPTO: RLUSD) in December 2024. In less than 18 months, it already has a market cap north of $1.5 billion. That pales in comparison to the total market cap of XRP ($85 billion), of course, but it is a worrisome sign that some value is being siphoned away from XRP.

Ripple would be a better buy than XRP

There's obviously enormous value in the blockchain payment infrastructure that Ripple is building right now. The big question, though, is where this value should flow. Should it flow to Ripple (the fintech company)? Or to XRP (the digital currency)?

My best guess is that most of the value will flow to Ripple. Case in point: Ripple recently lined up $500 million in financing, valuing the company at a whopping $40 billion. Then, in March, Ripple began buying back shares at a $50 billion valuation. That's on par with Coinbase Global (NASDAQ: COIN), which has a current market cap of $50 billion.

If you're looking to profit from the upside potential of blockchain payments, investing in a publicly traded fintech company might be a better option than investing in XRP. Two of the best options right now are Coinbase and Circle Internet Group (NYSE: CRCL), both of which are building out blockchain payment infrastructure. For now, unfortunately, XRP is just too risky and can be safely avoided.

Dominic Basulto has positions in Circle Internet Group and XRP. The Motley Fool has positions in and recommends XRP. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.