Will XRP Settle Below $1? A Closer Look at Ripple's Future After the SEC Victory

The Recent Rally Proves Easy to Fade

XRP’s dramatic climb to $3.65 in 2025 sent shockwaves through the crypto community. The catalyst was clear: the US Securities and Exchange Commission, under new leadership aligned with a pro-crypto agenda, dropped its five-year legal battle against Ripple. This decision represented a massive regulatory win for the company and triggered a wave of optimism among token holders. However, what looked like a turning point has quickly unraveled. The token has already retreated 39% from its peak, trading near $1.92 at current levels, signaling that institutional enthusiasm may have been overstated.

Why Banks Aren’t Actually Buying XRP

At its core, Ripple designed XRP to serve a practical purpose: standardizing cross-border payments and reducing friction in global banking infrastructure. The premise sounds compelling. By using XRP as a bridge currency, banks could theoretically eliminate expensive currency conversion fees and settle transactions instantly across borders. Transaction costs would be minuscule—as low as 0.00001 tokens.

Yet this theoretical advantage hasn’t translated into real adoption. Banks operating through the Ripple Payments network have discovered they don’t need XRP at all. The infrastructure works equally well with fiat currencies, delivering the same speed and efficiency without exposing institutions to cryptocurrency volatility. This is a critical flaw in the XRP investment thesis.

More significantly, Ripple launched Ripple USD (RLUSD), a stablecoin, last year. For payment systems, a stablecoin offers everything XRP does—instant settlement, minimal fees—while eliminating the price swings that would terrify a bank’s risk management team. Why would financial institutions hold a volatile token when they can use a stable alternative on the same network? The answer is increasingly obvious: they won’t.

The ETF Mirage

Following the SEC’s regulatory blessing, approval of spot XRP exchange-traded funds began trickling in. On the surface, this seemed bullish. Bitcoin’s spot ETF approvals created a new institutional demand channel, driving billions into the asset. However, XRP faces a fundamental disadvantage Bitcoin doesn’t have.

Bitcoin derives its value from being a true store of value. It’s decentralized, has a hard supply cap of 21 million coins, and carries genuine scarcity appeal. Financial advisors could market it as “digital gold.” XRP, by contrast, lacks these characteristics. It has a 100-billion-token supply, with Ripple controlling 40 billion of them. Ripple releases these holdings gradually to meet institutional demand—a structure that undermines any perception of scarcity.

ETFs simply won’t fill the same investment gap for XRP that they did for Bitcoin. Without the store-of-value narrative, the regulatory approval becomes just another footnote rather than a catalyst for sustained upside.

The Historical Pattern That Keeps Repeating

This isn’t XRP’s first false dawn. In 2018, the token hit a record high of roughly $3.84 before collapsing over 95% in the following year. The same structural weaknesses plaguing XRP today were present then: insufficient real-world use, competition from alternatives, and tokenomics that didn’t inspire confidence.

History suggests we may be witnessing a similar arc unfold right now. The 39% decline since the recent peak could be just the beginning of a much sharper downward move if investor enthusiasm continues to fade.

A Five-Year Outlook

Looking ahead five years, several scenarios could unfold. In the most optimistic case, corporate adoption accelerates and XRP becomes genuinely embedded in payment infrastructure. But given the headwinds outlined above—the availability of superior alternatives like RLUSD, weak fundamentals, and the absence of a compelling investment narrative—this seems unlikely.

More probable is a continuation of the pattern observed historically. If Ripple Payments remains niche and investors conclude XRP isn’t a credible store of value, the token will struggle to maintain current levels. A return to below $1 per token appears very possible within a five-year window, potentially preceded by another severe drawdown similar to 2018.

For investors considering XRP today, the regulatory victory from the US may have already been priced in. What remains is the harder question: does XRP have fundamental demand outside of speculative interest? The market’s recent pullback suggests the answer, for many participants, is no.