Should You Buy XRP While It's Under $3?

When XRP (CRYPTO: XRP) hit a 52-week high of $3.39 back in mid-January, it seemed to be the obvious, no-brainer cryptocurrency investment of the year. At that point, it was up a staggering 578% from Election Day.

But XRP has since fallen past the $3 price point, and is now closer to $2 than to $3. Sentiment on XRP has soured, and it is now down 3% for the year. So is this a bargain-priced crypto to pick up on the cheap, or one that you should avoid in favor of other cryptocurrencies with higher upside potential?

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The case for buying XRP

It's relatively easy to make the case for buying XRP. After all, the worst of its regulatory headaches appear to be behind it, and the pro-crypto approach of the Trump administration has led to new optimism about the long-term prospects of the crypto sector, and especially for riskier altcoins such as XRP.

Image source: Getty Images.

Even after a volatile first quarter, XRP remains one of the frontrunners when it comes to getting Securities and Exchange Commission approval for a spot crypto exchange-traded fund (ETF). If that happens, XRP would join Bitcoin and Ethereum as the only other cryptocurrencies with a spot ETF. Once a new spot ETF is available for trading, XRP could see a new wave of institutional adoption.

At the same time, Ripple, the company behind the XRP token, continues to roll out new ideas for business expansion and growth. For example, Ripple launched a stablecoin for the XRP blockchain ecosystem back in December, and recently made a $5 billion acquisition bid for Circle, the company behind the popular USDC stablecoin. Ripple is also pursuing innovative use cases for the XRP blockchain, including new asset tokenization initiatives.

The case for not buying XRP

But here's the thing: Tariff uncertainty and global macroeconomic volatility have thrown sand into the gears of the crypto sector. Much of the pro-crypto optimism of January has vanished.

It's becoming a real question whether the Trump administration can pass any kind of crypto legislation. It's one thing to draw up a list of executive orders, and another thing to create comprehensive legislation for crypto that has the support of both political parties.

Moreover, overall volatility in the crypto sector could make it much harder for the SEC to sign off on new spot ETFs. The first batch of spot XRP ETFs was supposed to get approved earlier this year, but the decision has now been pushed back to mid-June. If market uncertainty persists, this might keep getting pushed back for months. Complicating matters further is the fact that regulatory issues with the SEC that have dogged Ripple (and XRP) since 2020 are still working their way through the system.

That's why you need to take all the fantastic, pie-in-the-sky price forecasts for XRP that are all over social media with a grain of salt. Right now, you can find price forecasts for XRP as high as $1,000, all based on the assumption that XRP will somehow find mass, wide-scale adoption.

What type of upside does XRP really have?

At the end of the day, I can't get the thought out of my head that the all-time high for XRP after nearly a decade is just $3.84. That's ridiculously low. I can't think of any other major cryptocurrency -- with the possible exception of Cardano -- that has promised so much and delivered so little.

If you buy XRP now when it's trading for a little more than $2, the best-case scenario might be doubling your money within the next five years. That perhaps sounds very enticing, until you realize that any $2 asset will double in value within five years, as long as it delivers a compound annual growth rate of 15%.

So a lot depends on your assessment of future growth prospects of XRP. At the beginning of 2025, it was a lot easier to make the case for XRP delivering 15% annualized returns during the next five years. But what about now?

Before investing in XRP, you need to be confident in its long-term outlook. As long as XRP accounts for only a tiny percentage of your portfolio, it might be worth adding as a high-risk, high-upside play on the future potential of the crypto sector. But definitely keep your expectations in check.

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Dominic Basulto has positions in Bitcoin, Cardano, Ethereum, USDC, and XRP. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, and XRP. The Motley Fool has a disclosure policy.