XRP in 5 Years: A Bridge to…Where, Exactly?

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XRP (XRP 2.26%), currently bobbing along just under $1.50, deserves a nod for at least trying to be useful in a market that seems determined to prove the existence of entirely imaginary assets. Created by Ripple, the idea was to speed up and cheapen international money transfers – a genuinely good notion, given that sending money across borders still often feels like entrusting a carrier pigeon with your life savings.

Ripple’s managed to snag some attention from big banks, like Bank of America and Santander, which, let’s be honest, are usually more interested in things like, well, being big banks. So, the question becomes: where will XRP be in five years? It’s a surprisingly difficult one, and not just because predicting the future is generally a fool’s errand – though I’ve met plenty of investors who seem quite comfortable with the role.

There’s a Bit of a Difference in What Ripple Actually Does

The optimistic view is straightforward: banks will adopt Ripple’s technology, and this will drive demand for XRP. But I suspect this misunderstands how banks actually use – or, more often, don’t use – Ripple’s offerings. It’s a bit like buying a top-of-the-line espresso machine and then exclusively making instant coffee. The potential is there, but the execution…well.

Ripple offers two core products. They’ve recently unified these under the banner of “Ripple Payments,” which sounds impressively corporate, but I’ll stick with the old names for clarity. Think of it as archaeological nomenclature – it helps keep things straight.

RippleNet is a settlement system designed to make transactions faster and cheaper. It’s essentially a messaging service – a very sophisticated one, admittedly – and banks tend to use it without ever touching XRP. The big names, like Bank of America, have dabbled with this. It’s a bit like ordering room service – you get the benefit without needing to know how the kitchen operates.

On-Demand Liquidity (ODL), on the other hand, does use XRP as a sort of “bridge” for cross-border transactions. Imagine sending money from the US to France. ODL converts dollars to XRP, then XRP to euros. It sounds clever, and it is, in a slightly Heath Robinson sort of way.

The bulls argue that increasing ODL adoption will drive demand for XRP. But I’m not convinced. For two reasons, really. First, ODL tends to serve smaller institutions – fintechs, remittance providers – not the behemoths of international finance. It’s a niche product, which limits its potential growth. Second, institutions immediately convert in and out of XRP. Every buy order is matched with a sell order. It’s like a very efficient, very pointless game of musical chairs. The volume is there, but the sustained demand isn’t.

Stablecoins Are Making a Play

And then there’s the matter of stablecoins. They’ve been quietly gaining traction in traditional finance, offering a more efficient and stable alternative to, well, just about everything. And with recent legislation, their role is only likely to grow. It’s a bit like watching a tortoise overtake a hare – slow and steady wins the race.

Ripple seems to recognize this. That’s why they’ve undergone a rebranding and made several acquisitions, including a $200 million purchase of RAIL. They clearly want their own stablecoin, RLUSD, to be a major player. Their website now prominently features “integrate stablecoin payments into your business.” It’s a bit like a ship altering course to avoid an iceberg – sensible, if a little belated.

This is a problem for XRP’s value. RLUSD can function as an alternative bridge asset in ODL transactions, further eroding the already limited demand for XRP. It’s a bit like having two nearly identical products competing for the same market – someone is going to lose out.

So, Is XRP a Buy?

In five years, Ripple will likely be a thriving payments infrastructure company, perhaps even more so than today. RLUSD will probably have gained some traction as a bridge asset for cross-border transfers. But even if Ripple’s products genuinely transform international banking, I don’t think XRP holders will benefit much. In five years, I suspect it will have struggled to keep pace with the rest of the market – or worse. It’s a perfectly respectable technology, but it feels…a bit like a solution in search of a problem. And in the world of finance, that’s rarely a good sign.

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2026-02-16 16:52