XRP (XRP-USD) has been on a bumpy ride over the past half a year, tumbling about 45%. Lately, the token has largely remained range-bound, with no clear catalyst to drive the next leg higher.
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That lack of momentum, however, stands in contrast to the underlying story. XRP powers the XRP Ledger, a decentralized network built for fast, low-cost transactions, which Ripple leverages for its cross-border payment solutions. Ripple CEO Brad Garlinghouse has pointed to growing adoption of this infrastructure as a potential long-term driver, even suggesting that XRP could eventually overtake Ethereum, the second-largest cryptocurrency, if usage continues to scale.
While no doubt Garlinghouse is strongly biased, looking at the token’s case, investor Adam Levy believes there are “reasons to remain bullish on XRP.”
Ripple has been expanding, driven partly by acquisitions, having bought firms like prime brokerage company Hidden Road for $1.25 billion and GTreasury, a cash-management platform, for $1 billion, while also strengthening its stablecoin push with Rail. The strategy is to build a full-service platform for financial institutions to encourage broader blockchain adoption.
That adoption could be supported by several tailwinds, including the tokenization of real-world assets, growing use of stablecoins such as RLUSD, clearer regulation, and increasing acceptance of blockchain technology from the U.S. Securities and Exchange Commission, which had previously taken legal action against Ripple.
“XRP is well-positioned to capitalize on those trends, as it’s a token with real utility thanks to its ties to Ripple and the XRP Ledger,” says Levy. “If Ripple can effectively grow the activity on its blockchain, it should see strong demand for XRP tokens.” Although the token supply is gradually diluted, increased usage could counterbalance that effect since a small amount of XRP is burned with each transaction.
So, can XRP really overtake Ethereum? It is currently the fourth-largest cryptocurrency with a market cap of about $88 billion, well behind Ethereum at roughly $280 billion, implying XRP would need to exceed about $4.58 to overtake it, assuming Ethereum’s price stays unchanged.
Beyond fundamentals, demand could be supported by rising interest in spot ETFs. XRP ETFs, launched last November, have already attracted over $1 billion in inflows, although that still trails the nearly $12 billion that Ethereum ETFs have drawn. This suggests institutional positioning in XRP may still be developing, which could tighten supply and support prices.
That said, there are still a “few things holding it back.” Ripple is building out broader blockchain utility but must deliver on execution, while its stablecoin RLUSD could reduce XRP’s role in liquidity. On top of that, existing holders selling at a loss create ongoing pressure, meaning demand needs to absorb that supply before prices can move “meaningfully higher.”
“The long-term potential for XRP remains high,” Levy summed up. “Whether it overtakes Ethereum to become the second-largest cryptocurrency is largely out of investors’ control. But at its current price, it looks like it’s worth holding.” (To watch Levy’s track record, click here)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.