Once upon a time, XRP was seen as the future of cryptocurrency. Millions of people still believe this today, so it's no surprise that it tends to see incredible gains when the crypto bull market comes around. What is surprising is how much XRP has rallied in recent weeks, and this has even the non-believers wondering whether XRP could in fact be the future of crypto and what this could mean for its price.
And that's why today we're going to do a deep dive into XRP. I'll bring you up to speed on what it's been up to, reveal why it's been pumping, and tell you how high it could go in the coming months.
Disclaimer: I'll start by saying that nothing in this post is financial advice, it's purely educational content that's intended to inform you about XRP.
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Ripple XRP Cryptocurrency Explained
XRP was founded in 2012 by software engineers Arthur Brito, David Schwartz, and Jed McCaleb. Back then, XRP was still known as Ripple. Around the time that XRP's mainnet was launched, the trio founded a company called OpenCoin and added Chris Larson as the fourth co-founder.
In 2013, OpenCoin rebranded to Ripple, which created quite a bit of confusion. Obviously, people would refer to Ripple as the crypto and Ripple as the company as if they were one in the same thing. This was a double-edged sword, as the activities of Ripple the company are arguably what made Ripple the crypto so successful in its early days, but this also attracted regulatory scrutiny.
Of course, that's because Ripple the crypto looked like a stock in Ripple the company, even though this technically wasn't correct. To clear up any confusion, Ripple the crypto rebranded to XRP in 2018. Fortunately or unfortunately, XRP is still referred to as Ripple today by many people and platforms.
Now, this is where things get interesting. Contrary to popular belief, there was never an ICO for XRP. Instead, 80% of XRP's initial and maximum supply of $100 billion was gifted to Ripple in 2012.
The remaining 20% was split among three of Ripple's four co-founders. $9.5 billion XRP went to Jed, $9.5 billion went to Chris and $1 billion went to Arthur. Jed infamously sold all his XRP during the last crypto bull market.
On-chain analysis suggests Chris has sold around $8.3 billion so far, with news reports suggesting he sold $4 billion back in 2021. It seems Arthur sold all his XRP very early on, possibly sometime in 2013. As for David, he was offered $500 million XRP, but instead opted for a 2% stake in Ripple.
David has since remarked on many occasions that he regrets not taking the XRP. The silver lining is that Ripple's valuation reportedly stands at around $11 billion, making David's 2% stake worth roughly $202 million, so he's not crying about it. Under the hood, XRP uses a consensus mechanism, simply called consensus, which involves processing transactions in the order they come in.
XRP's novel consensus mechanism makes it possible to process up to 1,500 transactions per second, with a three to five-second finality, which was actually quite lightning fast back in the day. As with all modern day cryptos with high TPS scores, XRP speed is fundamentally due to its relative centralization. Even though XRP has over 110 active validators, most transactions are processed by a set of just 35 validators, known as the Unique Node List, or UNL, and this is managed by the XRP Ledger Foundation, an Estonian nonprofit first established in 2020 that oversees XRP's ongoing development.
Notably, XRP validators do not need to stake or lock XRP to process transactions, nor do they earn transaction fees for doing so. Validator selection is based on trust and reputation, hence the UNL. What's fascinating is that this setup technically makes it possible for you to choose which XRP validators to use.
Even more notably, wallets currently need to hold a minimum of one XRP as a reserve, and transaction fees on XRP are burned. And this has the practical effect of restricting XRP's supply, though this effect is minimal. With six million accounts on the XRP Ledger and just over 13 million XRP burned, these features have restricted less than one percent of XRP's total supply, which is negligible.
As far as utility goes, XRP's original purpose was to be used as a bridge currency in the products and services provided by Ripple, today known as Ripple Labs. In short, an asset like the US dollar could be swapped for XRP at a US bank, and then this XRP could be swapped for Swiss francs at a Swiss bank. The practical effect of this was that you could transfer assets instantly around the world, namely currencies.
The possibility that XRP could become this standard for transferring assets instantly around the world is precisely why it continues to be popular with narratives like XRP being the next SWIFT. The fact that this was being done primarily via banks is also why XRP was so hated by diehard crypto believers who labeled XRP and similar cryptos as banker coins. There's also XRP's use of the ISO 20022 interoperability standard for payments, but let's not go down that rabbit hole.
Now over the last couple of years XRP's utility has expanded, and the crypto project has been slowly turning its focus towards retail. The same is arguably true of Ripple Labs, and this pivot to retail has created a bit of controversy within the XRP community, because most XRP holders bought because of the institutional aspects, not the retail aspects. And as you'll see, this pivot could be rocket fuel for XRP's price.
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Ripple XRP Pivot From Institutions To Retail
In retrospect it's possible that this began as early as 2019 when a company called XRPL Labs was incorporated in the Netherlands.
Close followers of XRP will know that XRPL Labs is the company behind Xamarin, which appears to be XRP's most popular functional wallet. By functional I mean that it's used for more than just storing and transferring XRP. The Xamarin wallet is quickly becoming the de facto front end for XRP's entire ecosystem.
As such you could say that Xamarin is analogous to crypto wallets like Metamask, and Xamarin's website notes that it has 1 million downloads so far. And this is where things get interesting yet again. Even though XRP has a very large community, this isn't really reflected on-chain.
In case you missed it, there are only around 6 million wallets on the XRP ledger. This isn't very impressive given that XRP has been around for a decade. But let's set that aside for now.
This suggests that most XRP holders are holding their XRP on exchanges, which is the case for many cryptos. XRPL Labs founder Witzer Wendt realized this disconnect between XRP's community and its on-chain activity very early on, and he's basically been looking to close that gap with products like Xamarin ever since. There's only one small problem though, and that's that XRP itself isn't very programmable.
In other words, XRP doesn't have the same kind of smart contract functionality that cryptos like Ethereum have. As another fun fact, Ethereum creator Vitalik Buterin almost became an intern at Ripple Labs back in the day. Naturally, he pitched adding smart contracts to XRP to David and the other devs.
David has noted in many interviews and presentations that they didn't add smart contracts to XRP because they were concerned it would create the same high fees and congestion issues you see on Ethereum and Solana, respectively. Not only that, but it's easy to forget the era in which XRP started. Back when XRP began, crypto's focus was institutional adoption, and that's just because there were essentially zero retail investors in crypto, much less users.
Put differently, the institutional market was exponentially larger than the retail market. As the years went on, however, it became clear that institutions weren't interested in adopting public and permissionless cryptos. They just wanted to copy the underlying technology to create private and permissioned blockchains.
At the same time, the number of crypto retail investors and users grew rapidly. It seems that XRP stakeholders got the memo sometime in 2023, and this is when a series of amendments were made to the XRP ledger to improve its programmability, such as enhanced AMM functions. However, it didn't take long to realize that XRP would need to make more drastic changes than minor amendments, and David admitted in an interview earlier this year that these amendments weren't meeting the demand of users, and this is presumably why an EVM compatible sidechain to XRP was introduced.
XRP's EVM sidechain was first revealed in late 2023, and is scheduled to launch sometime in 2025. Oddly enough, this sidechain is based on Cosmos, and this makes XRP's upcoming EVM sidechain analogous to the Vitza. Vitza seems to have confirmed in a presentation earlier this year that Xamarin will support XRP's EVM sidechain, as he said that it will have cross-chain functionality.
Meanwhile, David has done many presentations about quote institutional grade DeFi on XRP, which gives the impression that XRP's upcoming developments are on the XRP ledger, and institutionally focused when the opposite is, in fact, the case.
Newsflash, but it seems that most of XRP's upcoming developments will be on its EVM sidechain, and retail orientated, with Xamarin as the de facto front end for this ecosystem. And this is more significant than you think, because Xamarin will effectively abstract away the fact that XRP users are using an EVM sidechain.
And this begs the question of where Ripple Labs fits into XRP's new retail use cases. The answer is where things get fascinating again. You see, XRP's original design made it a direct competitor to stablecoins.
Consider that both make it possible to transfer value instantly around the world, namely currencies. As I'm sure you will all have heard, Ripple revealed its own stablecoin, dubbed RLUSD, earlier this year. However, I bet only a few of you have noticed the changes that Ripple has made to its website.
Ripple now offers three solutions. Payments, digital asset custody, and its stablecoin, which will likely also play a role in the payments offering. As I mentioned earlier, this possibility is a big part of why some in the XRP community are nervous.
If Ripple has RLUSD, why does it need XRP?
Although Ripple executives have insisted that RLUSD will be nothing but beneficial for XRP, this isn't as clear-cut as they've made it sound. Besides the fact that RLUSD could eat into XRP's existing market share for cross-border payments, it's possible that most of RLUSD's supply won't even be on the XRP ledger. This is because Ripple is also launching RLUSD on Ethereum, where most of crypto's liquidity currently is.
For what it's worth, it's likely that lots of RLUSD's supply will be on XRP's EVM sidechain, which will leverage a form of XRP for fees. More importantly, XRP could become very robust DeFi collateral. This brings me to XRP's current and future price action.
XRP Price Analysis And 2025 Price Prediction
XRP has practically gone vertical since Trump won the US election in November. For reference, Trump has made lots of pro-crypto comments and it's assumed that this will translate to pro-crypto policy. If you look closely, you'll notice that XRP really started ripping after it was reported that Ripple CEO Brad Garlinghouse was rumored to have met with Trump personally.
Similarly, the most recent ripping rally was initially triggered by the news that SEC Chairman Gary Gensler would be stepping down. On that note, if you've been keeping up with our updates about the SEC's case against Ripple, you'll know that Ripple settled with the SEC over the summer. What you may not know though is that the SEC recently appealed that ruling.
The good news is that this is unlikely to change the fact that XRP itself is not a security and secondary sales of XRP are not securities. The bad news is that the SEC's refusal to back down could create bad news for XRP from time to time and this assumes the appeal won't be abandoned when a new SEC chair is appointed after Gary steps down in January, which is actually very likely. In any case, at the time of writing this post, XRP is close to hitting $3, which is a key psychological level.
The imminent launch of Ripple's RLUSD stablecoin may be the catalyst that takes it above $3 and to new all-time highs. Conversely, it could mark a local top for XRP. The keywords local top.
How high XRP could go in this cycle is hard to know given all the factors involved, but one thing is certain. XRP's market cap will not be flipping Ethereum or Bitcoin. Not sure who needs to hear it, but price tag isn't what determines a crypto's potential.
It's the market cap. The larger the market cap, the harder it is to pump a crypto's price in percentage terms. Well XRP has an enormous market cap.
That said, it's possible, keyword possible, that XRP could be following ETH one cycle behind. If this is the case, then XRP could hit a market cap of around $540 billion at the cycle top, which could occur sometime in 2025 and this would translate to an XRP top of around $7. This is amazing for everyone who's been DCA-ing into XRP over the last few years, but not so amazing for those who've bought it any time over the past few weeks.
That's because it only translates to a 3x or so from XRP's current price. There are lots of other cryptos out there with more potential at this stage. If you're wondering which ones, the answer is the altcoins in XRP's ecosystem, which are obscenely undervalued relative to XRP.
If even a fraction of capital is rotated out of XRP into these altcoins, many of them could see gains of 100x or more, and this is inevitable when XRP's full DeFi functionality comes online. As I hinted a few moments ago, the new XRP utility that everyone seems to be forgetting about is its use as collateral in the upcoming DeFi protocols. The fact that XRP has such a massive market cap and a relatively stable price makes it a robust asset to borrow against in DeFi, just like ETC and ETH.
All that's missing is the lending and borrowing protocols to make it happen for XRP. Lo and behold, David and Ripple's developers have been laser-focused on launching a lending and borrowing protocol for XRP. When that happens, tens of billions of dollars of liquidity could be unlocked and flood into XRP's ecosystem.
Speaking of which, most of this liquidity could come in the form of RLUSD, which will likely be possible to borrow using XRP as collateral in its upcoming DeFi protocols. And this is especially likely given that Ripple's motivation for launching RLUSD was not payments per se, but DeFi per David's own admission. Now all we need to do is figure out which altcoins in XRP's ecosystem will pump the most.
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Ripple XRP Roadmap 2025 Milestones
Now whether XRP could pull a 3x or more ultimately depends on its upcoming milestones. XRP has no roadmap but lots of milestones.
Now some of these milestones have been mentioned already, such as the launch of the XRP EVM sidechain and the introduction of borrowing and lending protocols for XRP. Another upcoming milestone is smart contract functionality on the XRP ledger itself, something that's currently expected to be done using a technology called Hooks. It seems there's not much point in explaining it.
As David mentioned in an October presentation that they're looking for suggestions on different ways of implementing smart contracts on XRP. This therefore implies that Hooks won't be the solution. That reminds me, the XRP ledger foundation recently reincorporated itself in France and this suggests that the foundation will play a more active role in XRP's development.
And this makes sense when you remember that XRP is looking to accelerate development to introduce new retail-focused use cases. It goes without saying that XRP will play a key role here. While it has yet to announce anything concrete, it's safe to say that XRP will be looking to leverage the RLUSD stablecoin for payments.
And this is evident in comments made by XRP's executives and blog posts made by XRP Labs. That also reminds me, in a recent panel discussion Brad seems to have implied that Ripple could be looking to get a banking license. Ripple also published a blog post last year about proof of stake which could foreshadow a transition to proof of stake for XRP.
Note that both things will be possible in 2025 thanks to a better regulatory backdrop. All we're wondering is whether Ripple will conduct an IPO, i.e. list its stock on exchanges. To bring you up to speed, Brad noted in 2022 that Ripple would look to do an IPO after its case with the SEC was settled.
Last year Ripple filed a job posting that reportedly made it look like it was preparing to list on a stock exchange. Earlier this year, however, Ripple bought back some of its stock to quote give its early investors an exit route, implying that it wouldn't be doing so by going public. Given the circumstances, it's hard to say whether Ripple's going public would help or hurt XRP. And the same goes for its stablecoin initiatives.
Ripple XRP Challenges Competition And Narrative
And this of course brings me to the challenges that XRP faces. And the first challenge is that XRP's price is still heavily influenced by Ripple.
This happens indirectly via what Ripple does or doesn't do with products that leverage XRP. And it also happens directly via the fact that Ripple gets lots of its funding from selling XRP. Historical data from CoinMarketCap reveals that XRP's circulating supply has increased by around $4 billion over the last year or so.
When you recall that Ripple's executives have already sold most of their XRP holdings and that XRP has no inflation, this means all this new supply came from Ripple selling. Assuming an average price of XRP of roughly 50 cents over this period, which is actually a conservative estimate, Ripple has sold no less than two billion dollars worth of XRP over the last year. To Ripple's credit though, they've made the selling very transparent, publishing quarterly reports revealing how much XRP they've sold.
Before you freak out, Ripple can't dump its XRP whenever it wants because it's subject to escrow. In plain English, one billion XRP is unlocked to Ripple every month. The XRP Ripple doesn't sell from that pile and gets added at the end of the escrow, i.e. re-locked at the end of the month, creating an indefinite vesting schedule that's dependent on Ripple.
It has sold roughly half of its initial allocation of 40 billion so far, and this ties into XRP's second challenge, and that's narrative. In case it wasn't clear enough, XRP's original appeal was that it would be working closely with banks to be used for international payments, and this is literally the reason why so many people have been DCAing into XRP and why retail investors keep aping into it. But as we've seen, XRP is starting to change its tune.
It's starting to become another standard smart contract crypto, and as far as we can tell, this is evidently alienating to everyone who's been buying all the XRP that Ripple has been selling over the last decade in the hopes that it could turn XRP into the world's next reserve currency. This dream seems to have gone out the window with XRP's refocus. This relates to XRP's third and biggest challenge, and that's competition.
The biggest problem with XRP's slow transition to a smart contract crypto is that the competition between smart contract cryptos is intense, and the SEC's lawsuit has cost XRP three years of adoption according to Ripple's own legal counsel. Those of you who have been in crypto for a while will know that three years is a long time. It's an even longer time when you consider that the smart contract crypto niche has been evolving fast ever since Ethereum launched in 2015.
To be blunt, the time to launch an EVM-compatible sidechain was in 2020 or 2021. The same is true of stablecoins where most of the market share has already been taken by USDT and USDC, and any remaining market share will likely be gobbled up by PayPal's PYUSD. And as we've seen with stablecoins on other legacy chains like Cardano, the RLUSD stablecoin may not get that much traction.
With all that said, there's one thing that XRP has which very few crypto projects have, and that's an enormous dedicated community that's ready to do whatever it takes to push XRP's price higher. From our perspective, all that Ripple and its execs need to do is make it clear what the new direction for XRP is, because right now it's in limbo between being the next reserve currency and another Ethereum killer. Once that happens, XRP could experience explosive growth.
The crazy thing is that even if this clarity never comes, it won't change the fact that a lot of new retail investors who come to crypto in the coming months will look at the top cryptos, see that XRP has a low price tag, and buy it, thinking that they will get rich if it gets as big as BTC or ETH, even though that's impossible. The craziest part is that there's a cohort of the XRP community that truly believe this could happen, and they'll convince the new blood that it will. Ladies and gentlemen, welcome to crypto.