XRP's 'North Star' Moment: Why Ripple's Wins Don't Always Mean Green Candles for Hodlers

Motley Fool recently decided to peer into the XRP crystal ball over the next five years—and folks, let's just say your lambo down payment might need a visit from the reprice fairy. The analysts took a long, hard look at where this particular altcoin might be headed, and the prognosis wasn't exactly the moon landing XRP degens have been penciling into their calendars.

XRP has been catching a ride on the broader crypto slump, down 28% year-to-date like it's trying to catch the last elevator down. More painfully, it's dropped more than 60% from its peak near $3.65 last July, now lounging around $1.30 like it's waiting for a Uber that got lost in 2018. That's roughly where it was before the U.S. SEC settled with Ripple and before spot XRP ETFs launched—two events that were supposed to send this thing to the moon, but apparently the rocket was grounded.

Here's the uncomfortable truth that Motley Fool surfaced, complete with a side of reality check: Ripple's growing success doesn't automatically translate to gains for XRP holders. The company's business has two distinct parts, kind of like how your crypto portfolio has the part that makes you money and the part that makes you question your life choices. First, there's the settlement messaging system used by major banks and institutions. Spoiler alert: this part doesn't use XRP. Institutions generally prefer not to touch volatile assets when settling transactions—apparently they didn't get the memo that volatility is a feature, not a bug.

The second segment handles smaller institutions and does use XRP for cross-border payments—converting funds into XRP, then into another currency. But here's the kicker: the institutional settlement side handles way more volume, like, significantly more. The XRP-based segment remains too small to move the needle on token value, basically the equivalent of bringing a water pistol to a firefight.

Enter $RLUSD. Ripple's new stablecoin has entered the chat, and it's giving institutions a choice: use a stable asset or a more volatile one. Since RLUSD can serve the same cross-border purpose as XRP, institutions now have options—kind of like being offered a salad or fries when you really just wanted to lose weight. Ripple's website even highlights stablecoin payments as a key platform feature now, which is basically the equivalent of your ex following your new partner on Instagram.

Motley Fool's verdict