Should You Invest in Ripple (XRP) in 2025? Insider’s Buying Guide!

Ripple’s native token, XRP (CRYPTO: XRP), has surged by about 240% since the beginning of the year, thanks to the boost from Donald Trump’s election win as president. Now valued at a market cap of $121 billion, XRP has turned many of its early investors into millionaires.

The optimism around XRP is straightforward. Over the next four years, the new administration is anticipated to relax regulations on digital currencies, potentially leading to broader adoption. However, the big question remains: will XRP live up to its expectations in 2025 and beyond? Let’s explore this further.

An Exceptionally Practical Digital Currency

While numerous blockchains claim to transform financial systems, Ripple is among the few that stand a chance of actually achieving this, especially in the realm of global payments. Ripple’s network is designed to simplify international transactions. Its cryptocurrency, XRP, acts as a mediator for currency exchange. For instance, it allows an American to convert USD to XRP and then XRP to Japanese yen swiftly and without costly intermediaries.

According to McKinsey, the global payments market represents a $2.4 trillion revenue opportunity, projected to grow at a compound annual growth rate (CAGR) of 5%, reaching $3.1 trillion by 2028. Ripple’s advantages in speed and cost could disrupt this market. Unlike traditional services like SWIFT that take days to settle transactions, Ripple completes transactions in seconds and at a fraction of the cost, charging just 0.00001 XRP per transaction, compared to traditional wire transfer fees of $35 to $50.

Facing Regulatory Challenges

Ripple and XRP have not escaped regulatory scrutiny, given the sensitive nature of international payments. Dominated by the U.S. dollar, which accounts for 58% of global payments outside the Eurozone, the introduction of alternative bridge currencies like XRP could diminish the dollar’s dominance. Furthermore, cryptocurrencies could potentially enable countries to circumvent U.S. sanctions.

Ripple’s primary regulatory challenges have been domestic. In August, RippleLabs was fined $125 million by the Securities and Exchange Commission (SEC) for selling XRP as unregistered securities. Nonetheless, the ruling also marked a partial win for Ripple, distinguishing between institutional direct sales, where XRP is considered a security, and retail sales on secondary markets, where it isn’t.

This ruling alleviated some uncertainty around XRP, and many believe the Trump administration could provide further relief. According to the New York Times, Trump’s nominee for SEC chair, Paul Atkins, is expected to pursue a more lenient stance on cryptocurrency regulation compared to his predecessor, Gary Gensler, known for his strict regulatory approach.

Consider Holding Off

The future appears promising for Ripple and XRP, with significant potential for practical application and reduced regulatory uncertainty potentially encouraging more institutional investment. However, cryptocurrencies lack traditional financial metrics like earnings or revenue, which makes them challenging to value with conventional methods such as the price-to-earnings (P/E) or price-to-sales ratios.

After its value more than tripled in 2024, XRP may have already factored in many of the positive changes expected in 2025. Therefore, long-term investors might consider waiting until the current hype subsides before taking a position in the cryptocurrency.

Will Ebiefung does not hold any position in the stocks mentioned. The Motley Fool recommends XRP and has a disclosure policy.

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