The bears are officially in charge of the cryptosphere right now with coins across the board seemingly searching for a bottom. Only about a month and a half ago Bitcoin (BTC-USD) notched an all-time high, but it already sits more than 30% below that milestone.
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As is often the case, weakness in Bitcoin has spilled over to the broader market. XRP (XRP-USD), for instance, has also been losing ground; the token is down 42% from July’s peak and currently trades at $2.05.
Whether or not the crypto space recovers shortly remains to be seen. However, according to investor Anthony Di Pizio, those considering an investment in XRP at current levels should think again.
It’s true that, unlike plenty of other cryptos that have little real utility and depend mainly on speculation, XRP stands out. That’s because it was built as a bridge currency for Ripple’s payments network, enabling banks to move money across borders quickly and cheaply.
The coin also had a big overhang removed earlier this year. Ripple spent five years fighting SEC allegations that it violated securities laws, a battle that began in 2020 and weighed heavily on XRP’s price. As part of the Trump administration’s pro-crypto shift, the SEC ultimately stepped back from the case, clearing a major source of uncertainty for XRP.
A lighter regulatory approach is helping XRP in other areas as well. The SEC has begun approving spot XRP ETFs, which could open the door to fresh demand from financial advisors and institutional investors.
But despite these developments, Di Pizio doesn’t think the outcome looks positive for XRP. First, Ripple’s payments network doesn’t actually require banks to use XRP, since it already supports fiat currencies. Ripple also introduced its own stablecoin, Ripple USD (RLUSD), last year, which has almost no volatility and is far more practical for payments. XRP, by contrast, is highly volatile, which leaves banks vulnerable to sudden losses even over short holding periods.
Furthermore, Di Pizio argues that ETFs may ultimately have a smaller impact on XRP than they did on Bitcoin. That’s because Bitcoin is widely regarded as a store of value, supported by its decentralized architecture and fixed supply of 21 million coins – features that create a built-in sense of scarcity. Bitcoin ETFs also removed a key hurdle by allowing institutions to gain exposure without handling digital wallets, which can be vulnerable to hacks and lack strong protections. XRP, however, lacks many of Bitcoin’s most coveted attributes, from its decentralization to its fixed supply. And if the market didn’t view XRP as a store of value before, launching ETFs is unlikely to spark a wave of new demand.
If Ripple’s payments network doesn’t drive demand for XRP, and investors don’t see the token as a solid store of value, then Di Pizio thinks XRP will struggle to maintain its price. Similar to how XRP shed more than 95% of its value in the year after it hit its record high in 2018, the investor sees the same scenario playing out again.
“Unfortunately,” Di Pizio explained, “I think a similar decline is underway right now, which means there could be more downside on the way for investors if history repeats. As a result, if we look five years into the future, I think there is a very good chance XRP settles well below $1 per token. (To watch Di Pizio’s track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.