XRP, the native token of Ripple, has surged approximately 240% this year, largely influenced by Donald Trump’s election victory. With a market capitalization reaching $121 billion, XRP has created many millionaires among its early investors.

The outlook for the cryptocurrency is positive. Many predict that under the new administration, regulatory barriers for digital assets may be lifted, possibly encouraging greater adoption. But will this optimism match reality? Let’s explore how XRP might fare in 2025 and the years following.

A Strong Cryptocurrency Option

Several blockchain technologies aim to transform the financial landscape, but few are as effective as Ripple. This digital network is specifically designed to enhance international money transfers. Its token, XRP, acts as an intermediary between different currencies. For instance, an American sending money to Japan could convert their dollars into XRP, and then from XRP to yen, avoiding the lengthy and costly processes typically involved.

McKinsey analysts estimate that global payments represent a $2.4 trillion revenue potential, with expected growth to $3.1 trillion by 2028 at an annual rate of 5%.

Ripple stands to make significant inroads into this market due to its speed and cost efficiency compared to systems like SWIFT. While SWIFT transactions may take days to process, Ripple completes transactions in seconds. Furthermore, fees on Ripple are remarkably low, costing just 0.00001 XRP — a tiny fraction of a cent, compared to $35 to $50 for traditional international wire transfers.

Regulatory Challenges Ahead

Ripple and XRP have faced significant regulatory challenges. Given the geopolitical sensitivity surrounding international payments, the dominance of the U.S. dollar in this domain (comprising 58% of global payments outside the Eurozone) makes the emergence of alternative currencies like XRP a concern. Additionally, cryptocurrencies may offer countries an avenue to bypass U.S. sanctions.

Ripple’s primary difficulties, however, originate domestically. In August, Ripple Labs was ordered to pay a $125 million fine by the Securities and Exchange Commission (SEC) for selling XRP tokens as unregistered securities. Thankfully, there was a partial win, as the ruling established a distinction between institutional sales (where XRP is considered a security) and retail sales on secondary markets (where it is not).

This decision has clarified some uncertainties regarding XRP. Moreover, many investors are hopeful that the new administration will create a favorable environment for the cryptocurrency sector, especially with Trump’s more conciliatory stance. According to the New York Times, Trump’s selection for SEC chair, Paul Atkins, supports a more lenient approach to crypto regulation, contrasting sharply with the current SEC head Gary Gensler, who has taken an aggressive regulatory stance.

A Cautious Approach Recommended

After experiencing over a 300% increase in value in 2024, XRP may have already accounted for much of the forthcoming growth expected in 2025. Therefore, long-term investors might want to wait until the hype surrounding cryptocurrencies fades before making any commitments to invest in XRP.

Will Ebiefung has no holdings in the stocks mentioned. The Motley Fool holds positions in and recommends XRP. The Motley Fool has a disclosure policy.

The Motley Fool is a content partner of YSL News, providing unbiased financial news and insights aimed at empowering individuals in managing their financial futures. This content is independently produced from YSL News.

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