XRP Has Fallen More Than 60% -- and Ripple's Success Won't Save It
Key Points
XRP is down significantly, even as Ripple inks major deals with institutions like Deutsche Bank and expands its tokenization business.
Most of Ripple's activities and products don't actually require XRP.
Ripple's own stablecoin, RLUSD, can now replace XRP as the key bridge asset in its payment systems.
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XRP (CRYPTO: XRP) is down more than 60% during the past eight months, yet Ripple -- the company behind XRP -- has been on a tear, inking new deals with some of the largest financial institutions in the world, like Deutsche Bank, which is integrating Ripple's payment technology to improve efficiency in areas like cross-border payments.
Tokenization -- the digitalization of real-world assets -- is booming, too; the Ripple's XRP Ledger now hosts $2.3 billion in tokenized real-world assets, up from under $1 billion at the start of the year.
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So why isn't XRP benefiting? Because most of Ripple's wins don't actually involve XRP.
Image source: Getty Images.
The core disconnect
This is the core disconnect that XRP bulls have struggled with for years. Ripple, a closely held company, has genuine enterprise traction, but its most widely adopted product -- what was called RippleNet -- functions primarily as a messaging layer and doesn't require banks to touch XRP, and most don't.
Ripple's liquidity feature -- what was called On-Demand Liquidity (ODL) -- is the primary way in which institutions make use of XRP. Except that Ripple's stablecoin, RLUSD, introduced at the end of 2024, can now be used in its place.
The bottom line
Ripple's business has never looked stronger. But that strength isn't flowing to XRP, and that's likely to continue. I wouldn't invest in XRP -- although I know plenty of people would disagree with me.
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Johnny Rice 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.
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