Where Will XRP Be in 3 Years?

The past few years have been a wild ride for XRP (CRYPTO: XRP) owners. The cryptocurrency is up 168% over the past three years, but lately its value has cratered -- falling 55% over the past 12 months.

If you own XRP, you're likely wondering if the next three years will look like the past. If you've been sitting on the sidelines with XRP, you might be trying to decide whether now is a good time to buy.

Here's where XRP is headed, and why avoiding it is probably your best bet.

Image source: Getty Images.

XRP's real-world use cases aren't panning out

One of the biggest draws for XRP investors has been Ripple Labs' payment network, RippleNet, which some financial institutions use to make cross-border money transfers quick and easy. The hope for XRP owners has been that as RippleNet adoption grows among financial services companies, XRP's value could rise.

The problem is that RippleNet doesn't use the XRP token in this process.

This means that even if more banks and financial institutions adopt RippleNet, there's no guarantee it'll boost XRP's value.

And that's not all that's holding XRP back. Some of the previous catalysts that drove XRP's price higher have played out.

For example, the launch of cryptocurrency exchange-traded funds (ETFs) was highly anticipated by many investors. And the initial interest seemed very high. But there are currently about seven XRP ETFs available right now, making it very easy for investors to gain exposure to XRP, yet its price has fallen more than 60% since the XRP ETFs debuted.

Could other catalysts come along that boost XRP's value? Of course. But right now, there doesn't appear to be anything on the horizon.

Where does that leave XRP in three years?

I don't think XRP gains much traction from here. There's been a major shift in investor sentiment away from cryptocurrencies over the past couple of years, and I think a lot of that has to do with artificial intelligence (AI).

AI companies have captured many investors' attention because they're creating real products and services that are tied to sales and profits. XRP and cryptocurrencies don't offer that.

Not only that, but many AI stocks have delivered huge returns in recent years. This gives people a chance to earn high returns from companies with real products, all without the risks associated with cryptocurrencies.

One great example of this is the memory company Micron Technology. The company's memory chips business is booming, with sales rising 346% and earnings soaring 1,200% in the third quarter of this year. Its share price has skyrocketed nearly 1,300% over the past three years.

It's too easy for investors to see that some AI stocks are simply a much better bet than most cryptocurrencies right now.

All of which means XRP may not budge too much from where it's sitting right now.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Micron Technology and XRP. The Motley Fool has a disclosure policy.