Is the Cryptocurrency XRP (Ripple) a Millionaire Maker?

Bitcoin's resurgence during the past year has reignited investor enthusiasm across the cryptocurrency market. The world's largest digital asset has soared on optimism surrounding spot exchange-traded fund (ETF) approvals, institutional inflows, and growing expectations that looser monetary policy could boost demand for risk assets.

Bitcoin Price data by YCharts

As Bitcoin flirts with new all-time highs, many investors are searching for the next big thing -- an asset that could outperform in the next bull cycle. One name that often surfaces in that conversation is XRP (CRYPTO: XRP), the cryptocurrency tied to Ripple.

But can XRP truly make investors millionaires? Read on to find out.

XRP's legal battle with the SEC: From uncertainty to vindication

Few cryptocurrencies have faced as much legal scrutiny as XRP. In 2020, the Securities and Exchange Commission (SEC) filed a lawsuit against Ripple, alleging that XRP was sold as an unregistered security. The case cast a long shadow over the project, prompting several major exchanges to delist the token or restrict trading. For years, the crypto community watched closely as the court battle dragged on.

Then came a turning point. In 2023, a federal judge ruled that XRP sales on secondary markets -- such as crypto exchanges -- did not constitute securities transactions, effectively handing Ripple a partial victory.

Not long after, Donald Trump's 2024 presidential victory added another jolt of optimism to the market. Given Trump's pro-crypto rhetoric on the campaign trail, many investors viewed his administration as a potential tailwind for the industry -- helping restore confidence in speculative tokens like XRP.

Image source: Getty Images.

What is XRP and why does it matter?

Unlike Bitcoin, which is often viewed as digital gold, XRP was designed to modernize the global payments system. Ripple introduced XRP as a bridge currency for cross-border transactions, enabling banks and payment providers to settle transfers in seconds rather than days.

Perhaps the most direct competitive force is the SWIFT network, which helps move an estimated $5 trillion in daily transactions. While SWIFT provides a mission-critical service, its reliance on multiple intermediaries causes operational friction and high processing fees for its users.

Through XRP's on-demand liquidity (ODL) system, financial institutions can bypass correspondent banks entirely -- dramatically lowering settlement costs. This value proposition is especially appealing in emerging markets and remittance services, where fees can consume a meaningful share of the transaction amount.

If Ripple were to capture even a modest portion of the multitrillion dollar global remittance and interbank payment market, the upside potential for XRP could be substantial.

Can XRP actually make you a millionaire? Let's run the math

To gauge whether XRP can truly create generational wealth, we first need to define what becoming a millionaire actually means.

Thanks to inflation, a dollar 30 years from now won't buy nearly as much as it does today. Assuming a steady 3% inflation rate, $1 million in 2025 dollars would be equivalent to about $412,000 in today's purchasing power in 2055.

To maintain the same value three decades from now, you'd need roughly $2.4 million -- meaning a $10,000 investment would have to grow 242-fold, or more than 24,000% overall. That equates to a 20.1% compound annual growth rate (CAGR) for 30 consecutive years.

If XRP's market capitalization were to rise proportionally, a 242-fold increase would push its current valuation of roughly $150 billion to an astonishing $36.4 trillion. For perspective, that would make XRP the most valuable financial network in history -- far exceeding the market caps of global giants like Apple, Nvidia, or even the largest financial institutions.

It's an exciting scenario, but the math underscores just how extraordinary such an outcome would need to be. Given that reality, XRP is unlikely to deliver millionaire-making returns from current levels. Long-term investors may be better served focusing on quality blue chip stocks or established cryptocurrencies such as Bitcoin, which offer stronger fundamentals and more predictable growth prospects.

Adam Spatacco has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple, Bitcoin, Nvidia, and XRP. The Motley Fool has a disclosure policy.