Should You Sell (or Avoid) XRP Due to the Conflict With Iran?

When the conflict with Iran quickly expanded to include the United Arab Emirates (UAE) on Feb. 28, the entire cryptocurrency market flinched. XRP, (CRYPTO: XRP) whose issuer Ripple has cultivated some deep roots in Dubai, which has been consistently under attack, is in a particularly uncomfortable moment.

Do the underlying causes of that discomfort warrant avoiding or selling the coin? Let's walk through what's at stake.

Image source: Getty Images.

Dubai is a hub in the crypto world

Global financial centers like New York, Hong Kong, Singapore, and Dubai are particularly important locations in crypto because they're where vast amounts of capital concentrates. They also tend to be where crypto tax laws are looser.

Ripple established its Middle East headquarters in Dubai in 2020, and about 20% of its global customer base operates in the region. In 2025, the company became the first blockchain payments provider licensed by the Dubai Financial Services Authority (DFSA). Most ambitiously, Dubai's Land Department selected the XRP Ledger (XRPL) for a real estate tokenization initiative, with secondary trading of tokenized assets going live last month.

The conflict puts Ripple's position at risk, but not how you might assume. Physical damage is not the problem here, and sales of XRP by the warring parties probably won't be substantial enough to matter if they happen at all.

The bigger threat is what the conflict will do for Dubai's identity as a safe and stable hub for cryptocurrency and fintech. If the city's appeal for institutional capital fades as investors become reluctant to be exposed to physical risk, all of Ripple's various regional partnerships, regulatory authorizations, and asset tokenization projects will lose a lot of their shine.

And that means Ripple will almost certainly need to look elsewhere in the world to find financial institutions willing to try it out and eventually bet on the XRPL as a financial tool. New relationships will need to be built from scratch, and so XRP's growth trajectory could well be constrained.

The coin has bigger problems (and bigger tailwinds) than this conflict

Now for a fact that should be comforting to investors even if it's unpleasant: XRP was cratering before the Iran conflict began. It's down by 37% during the past 12 months.

Furthermore, Ripple isn't overly dependent on Dubai for finding growth opportunities for XRP. It holds more than 60 operating licenses covering Singapore, Ireland, the Cayman Islands, and multiple U.S. states, and it's pursuing even more. Nor does the conflict diminish XRP's investment thesis, or detract from the real gains the coin and its chain have seen in tokenized assets being onboarded at a rapid pace recently.

Of course, a prolonged conflict that degrades the global energy market could spark a recession that brings the coin's price down sharply. That means the proper approach here is caution. Don't sell XRP, but don't add to your position if you won't be able to hold your coins for at least a few years.

We are in uncharted territory now. Leave yourself a margin of error, and ensure that your portfolio is well-diversified.

Alex Carchidi 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.