Is Ripple (XRP) a Millionaire Maker?

XRP (XRP 0.84%), the native cryptocurrency of the Ripple payment protocol network, reached its all-time high of $3.84 on Jan. 4, 2018. That represented a whopping gain of nearly 40,000% over the previous 12 months.

But today, XRP trades at about $0.50. Like many smaller altcoins, XRP lost its luster as rising interest rates chilled the cryptocurrency market. It also faced tougher regulatory and competitive headwinds than many other cryptocurrencies. But could XRP bounce back over the next few years and turn a $10,000 investment into over $1 million?

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XRP’s biggest tailwinds and headwinds

Back in 2012, a start-up called Opencoin (which was later rebranded as Ripple Labs) launched Ripple as its payment protocol network for settling real-time gross payments, remittance payments, and currency exchange transactions. It routed Ripple’s transactions through its own blockchain-based ledger and claimed it could provide secure, instant, and “nearly free global financial transactions of any size with no chargebacks.”

Today, financial institutions like Travelex Bank, Tranglo, and Sentbe use Ripple’s payment protocol network. However, Ripple’s XRP cryptocurrency hasn’t been as widely adopted for payments as Bitcoin (BTC 4.04%) or Ether (ETH 1.91%).

Ripple was considered an innovative way to process payments a decade ago, but it now faces fierce competition from similar blockchain-powered networks like Ethereum, which hosts a wider range of decentralized apps and tokens; and Solana (SOL 2.52%), which processes transactions at a faster rate with lower fees.

Meanwhile, the U.S. Securities and Exchange (SEC) sued Ripple and two of its executives in late 2020 for raising $1.3 billion through an offering of XRP tokens. The SEC claims that offering was an illegal sale of unregistered securities.

Last July, a U.S. judge ruled that XRP tokens weren’t actually unregistered securities, and the SEC subsequently dropped its lawsuit against Ripple’s two executives. However, a final trial between the SEC and Ripple kicked off in late April, and it’s expected to drag on for at least a few more months before a final decision is reached. That uncertain outcome will likely remain the biggest near-term headwind for XRP this year.

Elevated interest rates remain the other major headwind for XRP and most other cryptocurrencies over the next few months. Many cryptocurrencies rallied earlier this year as investors expected the Federal Reserve to gradually cut interest rates, but hotter-than-expected inflation reports dampened those hopes.

Could XRP generate millionaire maker gains in a few years?

If XRP’s price surges 668% to its all-time high of $3.84 again, it would only turn a $10,000 investment into $76,800. According to Digital Coin Price’s estimates, XRP might revisit that record high by 2030. Cryptonewsz.com is even more bullish: it believes XRP will rise to $9.81 by 2030, which would turn a $10,000 investment into more than $196,000.

But for XRP to turn a $10,000 investment into over $1 million, it would need to generate a 100-bagger gain. Even the most bullish forecasts fall short of those expectations. Last June, crypto hedge fund manager Thomas Kralow claimed that XRP’s price would hit $30 by the end of 2023. That would have represented a 5,900% gain from $0.50 and turned a $10,000 investment into $600,000. However, many critics scoffed at Kralow’s $30 price target, since it would have boosted XRP’s market cap to $3 trillion — more than double the combined value of all of the market’s other cryptocurrencies.

XRP’s price reached $0.64 at the end of 2023, but declined about 20% this year as investors fretted over its unresolved regulatory issues, the macro headwinds, and its ability to keep up with newer blockchain networks like Ethereum and Solana.

Therefore, it seems doubtful that XRP will generate millionaire-making gains by the end of the decade. But I think it could easily double, triple, or even quadruple if it scores a definitive legal victory against the SEC and the Fed cuts interest rates. In other words, it could still be a promising long-term play for investors who can stomach all the near-term volatility.