What's More Likely for XRP in 2026: Rising to $3 or Falling to $1?

It wasn't all that long ago that it looked like XRP (CRYPTO: XRP), one of the leading cryptocurrencies in the world, might be heading for $4 and higher. After the U.S. election, when enthusiasm around crypto was high, XRP's value shot up to more than $3. Today, however, it struggles to even stay above $1.50.

Crypto reform could reenergize investors and send XRP much higher, but so far, there hasn't been a catalyst to give it a significant boost. But with the Clarity Act making progress and passing the Senate Banking Committee recently, there is some hope out there.

Down 26% this year, which is more likely: XRP soaring on positive crypto news and reaching $3 again, or its freefall continuing and it falling to $1 or lower? Here's where I see the cryptocurrency going this year.

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Why the passing of the Clarity Act may not be enough for XRP to take off

If the Clarity Act passes this year, which is by no means a certainty, it'll be a great development for the broader crypto industry, as the bill will create an important framework around how cryptocurrencies should be regulated. But arguably a much more important factor is what happens with interest rates.

There's a new Fed chair with Kevin Warsh taking over from Jerome Powell, and there's plenty of doubt about what will happen with interest rates. If they end up coming down, as the president has been pushing for, that could lead to greater speculation and risk-taking in the markets. But with inflation being on the rise recently, there's the danger that an interest rate hike may be more probable. And if that happens, there may be an even sharper decline to come for XRP and other cryptocurrencies.

XRP may be destined to fall below $1 this year

I don't believe that even the passing of the Clarity Act would be enough to send XRP soaring. Crypto has been struggling this year amid challenging economic and geopolitical conditions, and with that uncertainty still weighing on the markets and not looking like it will end anytime soon, I'm inclined to believe that there's a greater probability XRP's value will decline rather than rise, and it may finish the year below $1.

If you're a believer in XRP's future and are willing to hang on, you may need to brace for more volatility ahead. If you haven't bought XRP yet but are considering doing so, the safer option may be to wait for now.

David Jagielski, CPA 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.