Cryptocurrency markets are currently under the influence of bears, with many coins appearing to search for a stable bottom. Just a month and a half ago, Bitcoin (BTC-USD) reached a new all-time high, but it’s now over 30% below that peak.
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Bitcoin’s decline has had a contagion effect, spreading weakness throughout the entire market. For instance, XRP (XRP-USD) has seen a drop of 42% from its peak in July and is now trading around $2.05.
What remains uncertain is whether the cryptocurrency market will see a quick recovery. Investor Anthony Di Pizio has some reservations for those thinking about buying XRP at its current price.
XRP does differ from many cryptocurrencies that lack real utility, primarily depending on speculation. It is designed as a bridge currency for Ripple’s payment network, facilitating fast and affordable cross-border transactions for banks.
Earlier this year, Ripple resolved a significant legal issue. The company had been entangled in a five-year battle with the SEC over allegations of breaking securities laws, which started in 2020 and had a substantial negative effect on XRP’s price. With the SEC now withdrawing its lawsuit, following the Trump administration’s supportive approach to cryptocurrency, this has eased some of the uncertainty surrounding XRP.
This deregulated framework is proving beneficial for XRP in other ways as well. Recently, the SEC has begun to approve spot XRP ETFs, which could draw interest from financial advisors and institutional investors.
Despite these advances, Di Pizio is skeptical about XRP’s future. He points out that Ripple’s payment network already accommodates fiat currencies, meaning banks might not feel the need to adopt XRP. Additionally, Ripple introduced its stablecoin, Ripple USD (RLUSD), which is less volatile and more suitable for transactions, while XRP’s volatility can pose risks for banks, even over short holding periods.
Di Pizio also believes the ETFs might impact Bitcoin more significantly than they do XRP. Bitcoin is widely seen as a reliable store of value, thanks to its decentralized nature and capped supply of 21 million coins, which creates scarcity. Bitcoin ETFs provide an easier way for institutions to invest without the risks associated with digital wallets that could be hacked. In contrast, XRP lacks the decentralization and fixed supply that Bitcoin has. If XRP hasn’t been regarded as a store of value in the past, it’s unlikely that the ETF approval will generate a surge in demand.
Di Pizio suggests that if Ripple’s payment network doesn’t stimulate demand for XRP, and investors continue to view the token as an unreliable store of value, its price could struggle. He compares the current situation to XRP’s all-time high in 2018, from which it lost over 95% of its value the following year—unfortunately, he fears a similar decline may be on the horizon. “Looking five years ahead, I think it’s likely that XRP will settle beneath $1 per token,” he stated.
