Prediction: This will be the next big move for Ripple’s XRP

XRP (XRP -1.78%) it was supposed to skyrocket in value as soon as Ripple (the company behind the XRP token) resolved its long-running battle with the SEC. But that just didn’t happen. News of a big Ripple gain broke on August 7th, and since then the price of XRP has risen from $0.50 to $0.60. (Yawning.) For the year, XRP is still down 2%.

So there are plenty of reasons to be skeptical about XRP’s prospects. Add in the fact that the crypto market recently witnessed a mini-crash, and it’s easy to see why investors might be scared off by speculative risk assets like XRP. That being said, there is a clear path to a doubling of the XRP price to $1 by 2025, and I believe this will be the next big move for Ripple’s XRP.

XRP’s path to $1

What’s particularly puzzling about XRP’s recent performance is that it doubled in value to the $1 mark last summer on similar news of a big legal gain. Last July, the judge in the SEC case ruled that XRP was a security when sold to institutional investors, but not a security when sold to retail investors. It might sound confusing, but the market took it as a clear signal that Ripple would eventually triumph over the SEC.

Image source: Getty Images.

However, this long-running crypto drama is full of twists and turns, and it is unclear whether the SEC will appeal the latest court decision. If it does, then it could mean more protracted legal disputes and more regulatory uncertainty. Add in the fact that the court fined Ripple $125 million in civil penalties, and it’s easy to see why the price of XRP didn’t rise as expected.

How high can XRP go?

If you think all the legal and regulatory headaches are behind you, XRP hitting $1 seems like a no-brainer. But can Ripple skyrocket from there? After all, the all-time high for XRP is only $3.84, and that was almost seven years ago. Over the past three years, XRP has struggled mightily.

Of course, you can come up with all sorts of reasons why XRP has been such a weak market. The SEC case, of course, tops the list. But when will investors get tired of all these excuses? At the end of the day, XRP is the only Top 10 crypto (ranked by market cap) that is down for the year. By way of comparison, Bitcoin (BTC -0.75%)is growing at 44% per year.

I can imagine a few scenarios where XRP breaks above $1 to hit a new all-time high. One scenario involves launching new spot ETFs for XRP. And indeed there has been speculation that XRP could be next in line after Bitcoin and Ethereum (ETH -0.77%) to get a spot ETF product. Another scenario involves a potential IPO for Ripple, in which case the price of XRP could go parabolic.

Remember: Ripple is a real company with a real financial product (a cross-border payment system powered by XRP), so clearing all legal hurdles means Ripple can go back to business as usual. Ripple already has extensive relationships within the banking and financial community, and Ripple CEO Brad Garlinghouse is a regular guest at high-profile events such as the World Economic Forum in Davos, Switzerland.

Because of the SEC lawsuit, Ripple was forced to suspend its US expansion plans. So, they may finally be ready to move forward in 2025. As proof of this, Ripple recently announced the testing of a new stablecoin pegged to the US dollar.

Is XRP a long-term buy?

While I am convinced that XRP can double its value in the short term, I am much less optimistic about its long-term prospects. In a way, it’s a shame. In a perfect world, patient long-term investors who held on to XRP during the really lean years should be handsomely rewarded. But this is Wall Street, not Hollywood, and the long-term outlook for XRP remains uncertain at best.

If you already own XRP, then it makes sense to hold onto it even more. It could be your winning crypto lottery ticket. But if you are a first-time crypto investor, you are probably better off buying Bitcoin, which continues to outperform the market and is also expected to double in value by the end of 2025. Better if you invest in Bitcoin , you won’t have to worry about the twists and turns of the long-running XRP courtroom drama.