XRP Is Down 25% Since July. Is a Rebound on the Horizon?

Key Points

• XRP was within striking distance of its all-time high of $3.84.

• XRP has a number of catalysts that could push it higher.

• For XRP to move significantly higher, Bitcoin will likely need to go on a year-end rally as well.

• 10 stocks we like better than XRP ›

It's been an up-and-down summer for XRP (CRYPTO: XRP). The world's third-largest cryptocurrency exploded in value during July, eventually hitting a 52-week high of $3.65. But since then, XRP has fallen 25%, and currently trades for just $2.72.

So is a rebound on the horizon for XRP? Or are crypto investors better off looking elsewhere?

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Plenty of new catalysts for XRP

The good news, if you're thinking about investing in XRP, is that there are plenty of new catalysts for the final months of 2025. The one that everyone is talking about, of course, is the imminent launch of new spot XRP ETFs. The Securities and Exchange Commission (SEC) decided to push off a decision on them until mid-October, but just about everyone expects them to start trading by the end of 2025.

The spot ETFs are important because they could result in a big wave of new money flowing into XRP from both retail and institutional investors. Earlier in the year, JPMorgan Chase (NYSE: JPM) projected that as much as $8 billion might flow into XRP after the spot ETFs launch.

Image source: Getty Images.

Moreover, Ripple, the company behind the XRP token, has been rolling out a number of new exciting products that could help to boost adoption of the XRP blockchain ledger by major financial institutions.

For example, at the end of last year, Ripple announced the launch of a new stablecoin called Ripple USD (CRYPTO: RLUSD). In less than 12 months, Ripple USD has already grown to a market cap of $688 million, ranking it among the 100 largest cryptocurrencies in the world.

Admittedly, some of these new product launches are more about generating buzz and hype than anything really substantial. Case in point: Ripple announced a new partnership with cryptocurrency exchange Gemini on the launch of an XRP credit card that pays back users 4% in XRP on purchases. That might generate media headlines, but it's unlikely to move the needle on XRP's price.

What do the prediction markets think?

When it comes to XRP, it's safe to ignore the pie-in-the-sky price forecasts of many crypto traders and investors. Sure, XRP might hit a price of $100 one day, but just how likely is that?

To get a better sense of where XRP might be headed, I've been looking at online prediction markets, where real-world traders are putting real dollars behind their predictions. Right now, things look very bullish indeed. Traders think there's a 52% chance of XRP hitting $3.75 by the end of the year, and a 36% chance of XRP hitting $4.

XRP made a run at its record high price of $3.84 in January, then fell. It made another run at this price in July, and again fell. So the third time could be the charm, if XRP goes on a run in the fall or winter.

As Bitcoin goes, so goes XRP?

At the end of the day, any real rebound in XRP's price depends on Bitcoin (CRYPTO: BTC). Currently, Bitcoin accounts for a whopping 58% of the entire market cap of the crypto market. So, as Bitcoin goes, so goes the crypto market.

If you look at the correlation between Bitcoin and XRP, this makes immediate sense. XRP has a 0.87 correlation with Bitcoin over the past 12 months. That's just about as high as you're going to get with a pair of cryptocurrencies. Put another way, if Bitcoin zigs, then so will XRP. And if Bitcoin zags, so will XRP.

That's why it's so important for Bitcoin to move higher in the coming months. If Bitcoin continues to trade for less than $120,000, then it's unlikely XRP will go on a major run. Doing so would require XRP to decouple from Bitcoin, and that's not likely to happen.

The one factor to watch for XRP

The one factor that I'm watching right now is the flow of new institutional investor money into XRP. Until the new spot XRP ETFs arrive, this might be the single-best indicator of just how much institutional demand there is for XRP.

According to the latest data from CoinShares, $1.2 billion has flowed into XRP since the start of the year. That's not a lot, compared to how much has flowed into Bitcoin and Ethereum (CRYPTO: ETH), but it still ranks third among all major cryptocurrencies.

That said, XRP is not the type of cryptocurrency that only goes up. As we've seen this year, sharp declines are common. So make sure you do your due diligence before allocating too much of your capital to XRP.

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JPMorgan Chase is an advertising partner of Motley Fool Money. Dominic Basulto has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, JPMorgan Chase, and XRP. The Motley Fool has a disclosure policy.