1 Underrated Reason to Buy XRP With $1,000 and Hold It For 5 Years or More

Regardless of your intention, your investment choices are likely influenced by others' actions and perceived beliefs. But that's completely normal. However, if you can develop an independent opinion, in addition to being aware of what other investors are up to, it can be a tremendous boon.

In the case of XRP (CRYPTO: XRP) specifically, knowing a bit about the community of investors and major holders means getting a sense of how and why the coin might continue to appreciate in value over time. It's even the basis for one of the lesser-realized arguments in favor of buying $1,000 of it and holding it for at least five years.

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Let's take a beat to appreciate why XRP's holder community is actually one of its most underrated assets.

Patient and well-informed holders can lead to higher prices

Cryptocurrency investors have a reputation for being a flighty bunch when it comes to the prospect of retaining their coins, and aren't generally known for holding them over extended periods.

There's always a shiny new project launching, a looming big collapse to flee from, and other trends that demand dumping of some assets in favor of buying others. These habits tend to make it very difficult for investors to make money in the long run.

But some communities have a high enough level of conviction in their coin to hold through turbulent times. In many cases, their conviction may even be sufficient to encourage them to hold underwater positions for years on end in hopes of a recovery, or to add to their positions when they think their coin is priced cheaply.

When it comes to picking coins to invest in, betting on diehard holder communities often pays off, like it did for those who bought and held XRP five years ago.

Take a look at this chart:

XRP Price data by YCharts.

As you can see, if everyone had simply dumped their tokens and never returned when the price fell, there wouldn't have been the conditions for more run-ups. But what makes the XRP community special?

Ripple, the company behind XRP, encourages the development of the community of coinholders by hosting events, like Community Day 2025, which was held in late January. Its similar efforts over the years have been highly successful, to say the least.

Today, the coin's holders congregate on a handful of social media platforms online, including multiple active locations on Reddit, TikTok, StockTwits, and elsewhere. There's even a (totally unofficial) meme coin celebrating the strength and enthusiasm of XRP's holder base.

Despite XRP formerly having a reputation for being held only by the uncool, it's now widely held by investors young and old. What's more? While not exactly an objective measurement, in my experience, XRP holders seem to have a fairly good understanding of why and how the coin is more likely to gain in value over time than when it will decline. Having that knowledge helps to shore up people's conviction that it's worth holding the coin for long periods.

Retail investors aren't the only noteworthy holders

In a survey of 277 institutional investors conducted by the consulting group EY-Parthenon in late 2024, around 20% of them claimed to hold XRP via their companies. Institutional adoption of the coin is still ongoing, but with such a decent portion of those surveyed holding it already, it looks like a confirmation of XRP's investment thesis.

After all, financial institutions like banks are the ones that investors are counting on to buy large volumes of XRP and transact with it to generate fees for the chain, which they're incentivized to do because it helps them avoid paying as much money for international money transfers.

Don't decide on the basis of this factor alone

The retail investor holder community of XRP is also an important source of evangelism to recruit new sources of capital. But, despite its unusual strength, it still shouldn't be the only thing that pushes you to invest. Even seemingly loyal holders can be dissuaded if market or economic conditions change significantly.

That means your focus needs to stay on the long-term drivers of the coin's actual performance, not just the fact that people are excited about holding it today.

There's no shortage of more concrete reasons to invest in XRP. Increasing volume of traffic on the chain over time is a surefire indicator that it's capturing more fees over time, which will fund the technology upgrades it needs to stay dominant relative to the competitors it's working to displace.

So, consider the community an ancillary reason to justify your investment of $1,000. Plan for a long hold, and the odds will be in your favor.

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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.