After Exploding by 18% in One Day, Is XRP a Buy?

On Aug. 19, XRP (CRYPTO: XRP) holders got a very pleasant surprise, with the coin's price jumping by 18.7% in the 24 hours after President Donald Trump's meeting with crypto executives and regulators at the White House. While the coin is still 64% below its all-time high set in 2025, there's now at least a chance that poor market sentiment is starting to turn.

So is XRP worth buying after this sharp pop, or is it destined to give up the gains?

Image source: The Motley Fool.

What drove the jump?

In the summit at the White House, the president and top regulators and executives from companies like Ripple and Coinbase Global discussed the future of the crypto sector givne the stalled Clarity Act. People betting in prediction markets presently give that bill around 26% odds of passing in 2026, but one of the narratives from the administration was that new crypto regulations would soon be conceived and implemented even if the Act never gets passed.

All of the crypto majors saw an exuberant response to that particular idea, with Bitcoin, Ethereum, and Solana all climbing by double digits, in contradiction to the sluggish and downward price action of the past 10 months. So, XRP was brought along for the ride upward on general optimism stemming from the president's comments, not because of anything direct or material that would benefit it specifically.

Of course, given that Ripple is XRP's issuer, and that the CEO of Ripple was at the summit and thus had an opportunity to appeal to the administration directly, it's reasonable to be a bit more bullish about the coin than before. As it's tailored to financial institutions, getting in with the decision-makers responsible for crafting new regulations is indeed especially valuable for XRP.

Why buying might not be the best move

Tokenomics is one of the most important battlegrounds in crypto right now; without favorable tokenomics, there isn't much reason to invest, as holding a coin may not translate into getting a cut of the success of the blockchain backing the coin. And, unfortunately, XRP is a bit behind on that front.

Every XRP Ledger (XRPL) transaction destroys just 0.00001 XRP. Over the 24-hour period ending Aug. 20, the network collected just $314 in fees -- practically nothing. That means holders are barely compensated for putting their capital at risk, as there's nothing that's meaningfully driving scarcity of XRP.

The communities of Ethereum and Solana have spent much of August arguing over exactly this issue, floating proposals to burn more and issue less. Nothing has changed yet. But the XRPL has no comparable proposals on the floor, and it might not ever.

With that said, if there's a thaw in this bear market, which is very likely (and perhaps soon), it'd buoy XRP along with everything else. That still wouldn't make XRP a buy. For now, it makes sense to wait for some new mechanism that rectifies the chain's economics to be more favorable for coinholders.

Until that happens, rallies are going to be based on sentiment alone, and that's a far too fickle driver of returns to invest in.

Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and XRP. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.