For nearly two years, XRP (XRP 4.09%) has been touted as a high-upside cryptocurrency. Yet, at its current price of $1.32, it is now perilously close to dropping below the psychologically important $1 price level.
Is this a unique buying opportunity for crypto investors -- a chance to pick up XRP on the cheap? Or is it yet another flashing red signal that XRP will never live up to the hype and buzz of the past 24 months?
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XRP's price history
Let's zoom out and take a look at XRP's price history, which dates all the way back to 2013. In the crypto world, that's an eternity. Only a handful of cryptocurrencies have been around as long as XRP. So XRP has certainly seen its share of market cycles.
Except for a major spike in 2018 and another major spike in 2024, XRP has rarely traded above $1. In the period from 2013 to 2018, XRP flatlined at a price well below $1. And in the period from 2018 to 2024, XRP had only limited success breaking above $1.
CRYPTO: XRP
Key Data Points
In short, XRP trading at a sky-high price of $3.65 last year was the exception, not the norm. As soon as XRP hit this 52-week high, it began to fall through the $3 price level, then the $2 price level, and now (potentially) the $1 price level.
The Ripple effect
One problem, quite simply, is that the terms "XRP" and "Ripple" are often used interchangeably. In fact, it's all too common to find investors referring to XRP as Ripple.
But they're not the same. Ripple is the company behind the XRP token. The XRP token is a bridge currency created by Ripple for moving money around on a blockchain ledger, and does not possess any inherent value of its own.
XRP is useful for the Ripple payment network, but outside of that, it has very little value. For example, you can't make typical online purchases with XRP.
Ultimately, buying XRP is not the same thing as buying equity in Ripple. I can't emphasize this enough: Buying XRP does not give you exposure to the long-term upside of Ripple, which is now valued at $50 billion.
Is XRP really just a stablecoin in disguise?
From my perspective, XRP currently functions much like a stablecoin. So shouldn't XRP be priced like a stablecoin? In other words, shouldn't XRP trade right around the $1 mark, just like a typical dollar-pegged stablecoin?
That's what has me concerned. XRP's price seems to be careening back down to $1. At the same time, Ripple appears to be going all-in on stablecoins, even going so far as to launch a stablecoin of its own in 2024.
All the value appears to be flowing to Ripple, with little new value flowing to XRP. Equity investors are getting rich, but crypto investors are not.
That's why, even though XRP seems wonderfully underpriced at $1, I'm staying away. The sky-high future price targets for XRP are exciting, but they may not be grounded in reality.
