Is XRP a Millionaire-Maker? | The Motley Fool
XRP and its issuer, Ripple, aim to streamline cross-border payments.
XRP investors received positive news last year. Ripple, the company behind XRP, settled a lawsuit with the SEC for $125 million, a significant reduction from the $2 billion sought. In November, the SEC approved the first spot XRP ETFs, offering an alternative investment avenue. However, despite a strong start, XRP's price declined, ending the year 9% lower.
XRP has recovered from previous downturns and holds long-term growth potential as a cross-border payments solution. With the opportunity to buy at a low price, could XRP be a millionaire-maker? Let's explore.
XRP's Role in Global Payments
Ripple introduced the XRP Ledger (XRPL) and XRP in 2012, aiming for fast and affordable cross-border transactions. The XRPL facilitates transfers in three to five seconds, with fees as low as $0.01, outpacing Bitcoin. Over 300 banks across six continents partner with Ripple, making it a key player in the global payments market.
Ripple's goal is to challenge SWIFT, the dominant international money transfer system. In June 2025, Ripple CEO Brad Garlinghouse predicted the XRPL could capture 14% of SWIFT's volume in five years, a significant target. With SWIFT handling $150 trillion annually, this equates to $21 trillion, a challenging but ambitious goal.
XRP's Functionality
XRP, the native cryptocurrency of the XRPL, serves multiple purposes. It pays transaction fees and provides on-demand liquidity for Ripple's banking partners. Financial institutions can convert cross-border transfers to XRP, eliminating the need for prefunded foreign currency accounts.
Increased XRPL and liquidity service usage will boost XRP demand, as it's integral to both. However, XRP's role is limited.
Ripple's Expansion
Ripple is diversifying beyond XRP. In October, it acquired Hidden Road, a brokerage firm, and rebranded it as Ripple Prime. In December, it received approval to form a federally chartered trust bank. Additionally, Ripple introduced Ripple USD, a stablecoin with fast transactions and minimal fees, offering stability without XRP's volatility.
Ripple's focus is shifting towards broader financial services, potentially overshadowing XRP's role.
The Million-Dollar Question
To be a millionaire-maker, a cryptocurrency must deliver 100x returns on a $10,000 investment, turning it into $1 million. While XRP's market cap is $115 billion, achieving 100x returns would value it at $11.5 trillion, surpassing Alphabet's market cap. However, the odds of this in the next decade are slim.
Despite the low probability, XRP remains a viable investment. The global payments market is projected to reach $290 trillion by 2030, and XRP's role as a bridge currency and ETF approval could boost its popularity. Consider XRP as a high-risk, high-reward investment, but manage expectations.
XRP's potential for success is present, but it's unlikely to be a millionaire-maker. The market's growth and XRP's unique position make it an intriguing, yet cautious, investment opportunity.
