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The XRP cryptocurrency was created in 2012 by a company called Ripple. It is designed to standardize transactions in the Ripple Payments network, which enables banks to send money across borders instantly, with negligible costs.
Unlike many cryptocurrencies, XRP has a specific use case tied to cross-border payments. However, XRP is trading lower in 2026 and is down 60% from last year’s peak of $3.65. The article outlines structural factors that could weigh on the token over the next 12 months, including Ripple’s role in supply and potential competition from Ripple’s stablecoin.
The global financial system remains fragmented. While many banks use the SWIFT network, others rely on intermediaries to settle transfers between institutions, which adds time and cost.
Ripple Payments was built to facilitate direct communication between banks, allowing transactions to be settled instantly without intermediaries. XRP was created as a bridge currency to standardize transfers. For example, an Australian bank might send XRP to an American bank instead of Australian dollars, reducing foreign exchange fees. The transaction is described as typically costing about 0.00001 XRP, or a fraction of one U.S. cent.
XRP differs from most major cryptocurrencies because of its connection to Ripple. The company controls about 38 billion of XRP’s 100 billion coins, released gradually to meet demand from banks and institutions. This structure makes XRP more centralized than decentralized cryptocurrencies, meaning investors’ outcomes are closely linked to Ripple’s operational success.
Bitcoin is cited as an example of a decentralized cryptocurrency, with a capped supply of 21 million coins that cannot be changed. New Bitcoin is issued through mining, where computers solve complex mathematical problems to validate transactions and add blocks to the blockchain.
In contrast, XRP faced regulatory pressure from the U.S. Securities and Exchange Commission (SEC). Because XRP is issued by Ripple, the SEC argued it should be classified as a financial security. The article states that these legal issues were settled last year as part of the Trump administration’s pro-crypto agenda, but it cautions investors to remain wary about centralized tokens like XRP.
Broadly, the cryptocurrency market has been under pressure for about the past six months as investors reduced exposure to highly speculative assets. The article attributes XRP’s 60% decline partly to structural issues that may be difficult to overcome.
1) Ripple Payments can use fiat currencies. The article notes that banks do not have to use XRP to benefit from instant cross-border transactions because Ripple Payments can also accommodate fiat currencies. As a result, XRP’s value may not rise even if Ripple Payments adoption increases.
2) Ripple’s stablecoin could reduce demand for XRP. Ripple offers a stablecoin called Ripple USD (RLUSD). Stablecoins are designed to maintain a steady value with practically zero volatility, making them useful as bridge currencies. The article argues that Ripple USD could displace XRP within the Ripple Payments network. It also states that RLUSD is built on the XRP Ledger, so any fees incurred when using it are still payable in XRP.
3) Bridge currency mechanics may not create investment value. The article describes how bridge currency transactions can involve offsetting roles. In the example given, the Australian bank would buy XRP tokens, while the American bank would sell them upon receipt to convert into U.S. dollars to continue its business. The article concludes that this structure creates no real value for XRP as an investment.
Before 2025, the last time XRP reached a new record high was in 2018. The article says XRP then plunged by 95% over the next two years, reaching a low of $0.15 per coin.
Given the headwinds described, the article predicts a similar decline could be underway, with XRP potentially sinking to about $0.15 over the next year or so.
As a result, the article advises investors to think twice before making large bets on XRP.
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