XRP Investors Have Waited 7 Years for This Moment. Here’s What Might Happen Next

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In 2018, the digital currency known as XRP (XRP) reached its peak value of $3.45, but soon after, it plummeted by over 90% due to multiple regulatory problems concerning its developer, Ripple. Later in 2020, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple for supposed violations of securities regulations, which has raised concerns about XRP’s future prospects.

However, under President Donald Trump, the SEC has taken a more accommodating stance towards the cryptocurrency sector, and Ripple’s legal issues have largely been resolved. After struggling for seven long years to regain its footing, XRP reached a fresh record high last Friday, July 18.

Here’s what might happen next.

Ripple aims to transform global banking

Cross-border transactions frequently require several days to be completed due to the fact that global banks may not always employ the same payment system. Although most banks utilize the SWIFT (Society for Worldwide Interbank Financial Telecommunication) network, some do not. As a result, they need intermediaries to handle money transfers, which delays the process and raises costs.

Ripple developed a payment network known as RippleNet, enabling global banks to carry out transactions with each other directly and immediately, regardless of their current infrastructure. To facilitate these transactions, they introduced the digital currency XRP, acting as a standard for such exchanges. For instance, a bank in Europe could send XRP to a Korean bank rather than euros, thereby avoiding expensive foreign exchange charges. The cost to transfer XRP across borders is an incredibly small 0.00001 tokens, equivalent to less than one U.S. cent.

Ripple currently controls approximately 41 billion XRP coins and distributes them progressively to match market demand, increasing the overall pool of 59 billion tokens. The Securities and Exchange Commission (SEC) finds this setup questionable, suggesting that XRP should be treated similarly to stocks, bonds, or other financial instruments issued by corporations. In contrast, most other cryptocurrencies like Bitcoin are mined rather than created centrally, which has spared them from the same degree of regulatory oversight.

In 2020, a lawsuit filed by the Securities and Exchange Commission (SEC) potentially disrupted Ripple’s business strategy, causing uncertainty among investors about XRP. This apprehension led to a significant drop in XRP’s value over the subsequent years. However, a judge’s decision from last August leaned slightly towards Ripple, yet the SEC chose to appeal, which could prolong the legal battle for several more years.

Trump’s election win marked a turning point for Ripple

Trump named Paul Atkins, a proponent of cryptocurrency, as the head of the Securities and Exchange Commission (SEC). Under his leadership, the agency has halted or abandoned legal actions against prominent crypto companies such as Binance and Coinbase. Additionally, the SEC consented to settle their proceedings with Ripple by withdrawing its appeal from last year’s decision, but a judge must still give final approval before the case can be officially concluded.

Excitedly speaking as an enthusiast, I’d rephrase it this way: With Ripple’s regulatory issues in the U.S. seemingly resolved, XRP has been attracting a surge of investors once more. However, what really catapulted XRP to a fresh all-time high last Friday was another positive development – the Securities and Exchange Commission (SEC) greenlighting a leveraged XRP exchange-traded fund (ETF) for trading on July 18. This approval sparked renewed excitement for the cryptocurrency, fueling its growth.

The ProShares Ultra XRP ETF invests in future contracts instead of owning XRP directly. However, this move is significant as it could pave the way for the eventual approval of spot XRP ETFs, with regulatory bodies currently considering multiple such applications. It’s worth noting that futures-based Bitcoin ETFs were given the green light before spot Bitcoin ETFs, which explains the excitement among investors.

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Here’s what might happen next

Despite the current momentum of XRP, I remain uncertain about its ability to maintain an upward trend. One reason for my skepticism lies in the inherent risks associated with using XRP within the Ripple Payments system, particularly for banks who must manage its volatility. For instance, if the value of XRP drops by 5% during a transaction, the parties involved could incur losses significantly greater than those experienced when transacting through traditional systems like SWIFT or other networks.

In addition, banks can process transactions via Ripple without using XRP, as the system supports the transfer of traditional currencies as well. Consequently, the prosperity of Ripple Payments may not directly impact the price of XRP. This suggests that speculative investors might play a larger role in determining the token’s value compared to organic demand, which is my second point.

ETFs have been beneficial for Bitcoin due to its perceived legitimacy as a form of value storage. This is attributed to its limited supply and decentralized structure, although the creator’s identity remains unknown. In contrast, XRP lacks decentralization since it’s managed by Ripple, making its worth susceptible to errors or missteps by the company. Consequently, when the SEC filed a lawsuit against Ripple, XRP’s price dropped significantly, and there’s a possibility that future U.S. governments may revisit regulating the company.

In my opinion, the approval of any type of XRP Exchange Traded Fund (ETF), whether leveraged or not, may not lead to a long-term increase in the token’s worth. Given this outlook, investors in XRP should be prepared for potential market volatility moving forward.

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2025-07-23 12:12