Ten years is an incredibly long time -- especially in the volatile crypto world. Want an example? If you bet $10,000 on XRP (CRYPTO: XRP) in early 2015, you would have a whopping $1.8 million today, assuming you could hold on through the ups and downs without selling. In this article, we will discuss whether XRP still boasts multibagger, long-term potential.
Institutional ownership is key
After more than a decade, clear trends are beginning to emerge in crypto performance. The long-term price charts of large mainstream coins like Bitcoin have trended up, consistently beating previous highs and staying above previous lows. This trend is encouraging because it suggests the asset is becoming a reliable store of value.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
Bitcoin Price data by YCharts.
Bitcoin's performance starkly contrasts with meme coins like Shiba Inu, which continue to follow a boom-and-bust pattern with no clear trend line. The difference could lie in institutional ownership.
Large financial institutions, such as mutual funds, pension funds, and even insurance companies, have begun investing in blue chip cryptos. Unlike retail investors, these deep-pocketed entities are likely highly diversified and liquid, making them less likely to panic and sell their holdings during the inevitable price gyrations. The result is more price stability and growth. While XRP is far behind Bitcoin, its institutional ownership could surge with regulatory wins and a potential exchange-traded fund (ETF).
The path toward an XRP ETF
An ETF is a bundle of assets that can be traded on exchanges like a regular stock. This process can benefit cryptocurrencies by making them more accessible to investors and institutions that might be uncomfortable with the asset class's peculiarities, such as digital wallets, addresses, transaction times, and fees.
So far, Bitcoin and Ethereum are the only cryptocurrencies that boast ETFs, likely contributing to their institutional adoption. However, XRP could be on track to join this prestigious club over the coming years. A slew of financial companies have submitted applications to the Securities and Exchange Commission (SEC) seeking permission to create XRP ETFs. These include digital asset manager Greyscale, whose application for a fund was acknowledged by the regulatory body this month.
Image source: Getty Images.
According to ETF.com, the acknowledgment triggers a 240-day review period, which means a final decision could be made by mid-October. The bad news is that XRP's developer, Ripple Labs, faces long-running litigation with the SEC over whether its past token sales represented unlicensed securities offerings. Legal uncertainty could hurt the asset's approval odds until a resolution is reached.
That said, the lawsuit was launched under the SEC's former head, Gary Gensler. The agency's new acting chairman, Mark Uyeda, has a long history of disagreeing with Gensler's approach and has already struck a more dovish policy stance toward the industry. Among other developments, it includes pausing a lawsuit against crypto exchange Binance as it reworks its policy. This could be a good sign for the Ripple lawsuit.
Is XRP a buy during the next decade?
Although it is impossible to consistently predict the future in financial markets, XRP looks poised for substantial growth during the next decade. With a market cap of more than $150 billion, the asset is already quite large, so investors shouldn't expect a repeat of the explosive surges of the past. But XRP looks positioned to enjoy steady growth as it moves further into the mainstream, overcomes its legal challenges, and attracts more institutional ownership.
Should you invest $1,000 in XRP right now?
Before you buy stock in XRP, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $854,317!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 7, 2025
Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
