Should You Buy XRP While It's Under $3? Here's What Smart Investors Should Know.

For much of 2025, XRP (CRYPTO: XRP) could do no wrong. The price got as high as $3.65 in July, and XRP-issuer Ripple finally finished its five-year lawsuit with the Securities and Exchange Commission (SEC).

XRP has come back to Earth recently, like most of the crypto market. It's down 25% over the last three months (as of Dec. 5), and it has been under $3 since early October. If you're thinking about buying the dip, here's what you should know first.

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XRP hit a major milestone last month

In November, the SEC approved the first spot XRP exchange-traded funds (ETFs). ETF approval is an important step because it opens up another avenue for investing in XRP, particularly for investors who can't or don't want to buy XRP tokens directly. Anyone who'd like to invest in XRP through an IRA or a Roth IRA can now do so with XRP ETFs. Additionally, hedge funds and other institutional investors can also buy these ETFs.

Institutional investments can be a significant growth driver, and the initial results have been promising. After less than a month, XRP ETFs have received inflows of over $750 million, according to CoinGlass.

Those results haven't produced any positive movement in XRP's price yet, but when it comes to cryptocurrency, good news usually doesn't outweigh a down market. As a crypto investor, you need to be prepared for volatility and the possibility of seeing your portfolio in the red.

XRP is a risky asset, so it's not recommended to take too large of a position in it, but ETF approval could help it outperform when the market bounces back. At the current price, you may want to consider picking up some XRP tokens. It's certainly possible that we could see XRP back above $3 again within a year's time.

Lyle Daly 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.