Will XRP Reach $5 By The End Of 2025?

XRP (CRYPTO: XRP) is one of the best-performing cryptocurrencies in 2024, with a massive increase of 235%. It had a more sluggish start in 2025 with an increase of only 8.9% in the first half of the year, and it will need to double from its current price to reach the milestone of $5 per token. I think that could be a daunting task in the last six months of the year. Last year, XRP benefited from the election victory of President Donald Trump as the president campaigned on a cryptocurrency-friendly agenda that included a looser regulatory framework for the industry. The U.S. Securities and Exchange Commission (SEC) sued Ripple -- the entity behind XRP -- in 2020 for violating securities laws, but the agency is now backing down, paving the way for the litigation process to conclude. Many optimistic investors in XRP believe that the resolution of Ripple's legal troubles could drive the next price surge of this token, but this is why the $5 target may be too ambitious - not just for 2025 but also in the long term. XRP Has Yet to Rise Higher Thanks to SEC's Friendlier Approach Ripple has created a payment network called Ripple Payments, designed to accelerate cross-border transactions by allowing international banks to communicate with each other regardless of the existing infrastructure they use. This eliminates the need for intermediaries, allowing banks to pay each other directly and instantly. Ripple created XRP to standardize those transactions. For example, instead of an Italian bank sending euros to a Japanese bank, they could send XRP instead, which would eliminate costly foreign exchange fees. Additionally, the cost of sending the actual payment in XRP could be as low as 0.00001 tokens, equivalent to a tiny fraction of a US cent. XRP has a total supply of 100 billion tokens, with 59 billion currently in circulation and the remaining 41 billion controlled by Ripple, which will gradually release them to meet demand. This distinguishes XRP from other cryptocurrencies like Bitcoin, which has no issuance units because the currency is earned through a process called "mining" and is therefore completely decentralized.

That is why the SEC sued Ripple in 2020. The agency argued that XRP should be classified as a financial security like stocks or bonds, as it was issued directly by a company. The consequences for Ripple would be severe, forcing them to operate within a tightly regulated framework. However, in August 2024, a judge ruled that XRP can only be considered a security when it is issued to organizations, but not when it is used in transactions or traded on public cryptocurrency exchanges. Ripple was still fined $125 million, but investors see it as a big win. The situation even improved further after President Trump's electoral victory, as he appointed cryptocurrency supporter Paul Atkins to head the SEC. Instead of pursuing an appeal of Judge ('s decision as initially planned, the agency has now backed down, and the case is ready to close. Don't Expect XRP to Reach 5 USD This Year According to a recent estimate by Finextra Research, Ripple has processed a payment volume of approximately 70 billion dollars since its establishment in 2012. Theoretically, the value of XRP will increase with greater payment volume and the growing adoption of Ripple Payments, but there are some caveats. First, banks do not need to use XRP to benefit from instant cross-border transactions through Ripple Payments, as the platform supports the use of alternatives including fiat currencies. Ripple has even launched a new stablecoin called Ripple USD earlier this year, and although it serves a different purpose than XRP, it provides organizations with another option when transferring their funds. Secondly, XRP can only maintain its value if banks and investors hold it. Referring back to my previous example, the Italian bank would have to buy XRP to send it to the Japanese bank, thus increasing its value. But if the Japanese bank immediately converts XRP into Japanese yen, that would be equivalent to a sell-off, causing the value of the token to decrease once again.

This means that the true value of XRP can actually be driven by demand from speculative investors, which explains the 235% increase of this token last year, largely following Trump's election victory. Despite the strong price surge, it is important to note that this token has yet to surpass the all-time high of $3.40, set in 2018, and has since stabilized around $2.20 as of June 30. Therefore, reaching the level of 5 dollars may be impossible in the second half of this year, regardless of the positive outcome between Ripple and the SEC. In fact, I also do not see any path leading to the level of 5 dollars in the long term.