Key Points
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Some analysts are predicting that it could hit $4 this year.
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The number of functions for XRP keeps expanding.
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XRP continues to outperform the benchmark cryptocurrency Bitcoin.
If you’re looking for a high-risk, high-reward cryptocurrency, look no further than XRP (CRYPTO: XRP). After soaring in value in the early part of 2025, it tumbled during the spring, only to mount a stunning recovery in July. However, during August, XRP has again dipped and now trades for about $3.
So is it once again time to buy the dip on XRP? Here are three reasons you should consider holding on to your XRP.
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XRP’s legal problems are in the rearview mirror
In early August, Ripple, the company behind the XRP token, finally settled its long-running litigation with the Securities and Exchange Commission (SEC). In December 2020, the SEC alleged that XRP was actually a security, and not a cryptocurrency, and XRP had been under a cloud of regulatory uncertainty ever since.
To end the case, Ripple agreed to pay a penalty of $125 million to the SEC in August, but at least it can get back to business as usual. That’s huge news for Ripple because its U.S.-based operations have been largely put on ice for the better part of five years. Already, there are signs of a return to form for the company with the launch of new services in 2025.
The utility narrative around XRP is building
When it comes to evaluating cryptocurrencies, a major factor is “utility.” This is a catchall term that can basically be boiled down to the following question: What can you actually do with this cryptocurrency, other than HODL (“hold on for dear life”) and hope it explodes in value one day?
Image source: Getty Images.
Right now, XRP’s primary function is acting as a bridge currency for cross-border payments. It’s faster, cheaper, and more efficient to use the XRP blockchain ledger to send cross-border payments than traditional financial networks.
Thus, XRP has always been known as a “banker’s coin.” Its primary use is for big financial institutions that are moving enormous sums of money across borders. According to top Ripple executives, XRP could one day power a new blockchain-based payment system to rival the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which uses 50-year-old technology.
The only problem is that XRP was not designed as a smart-contract blockchain platform, so it doesn’t have anywhere close to the functionality of Ethereum (CRYPTO: ETH), which remains the world’s preeminent smart-contract blockchain platform. Therefore, in the eyes of many, XRP still has very limited appeal for average investors, unless they are sending money abroad.
But that could be changing. Almost every month seems to bring some new function for XRP, giving it expanded utility. Recently, cryptocurrency exchange Gemini introduced a new “XRP credit card” that’s branded with the crypto’s logo and includes the option to earn 4% back in XRP on purchases. While some think the new card is nothing more than a marketing gimmick, it does show that XRP has the potential to become much more of a mainstream cryptocurrency.
XRP continues to outpace Bitcoin
Most encouragingly, XRP continues to run circles around Bitcoin, which is typically considered the benchmark cryptocurrency that all others are measured against. During the past 100 days, XRP is up 38%, while Bitcoin is only up 7%. For the year, XRP is up 43%, while Bitcoin is up 22%.
As long as XRP continues to outpace Bitcoin, there’s no need to sell. And that’s especially the case since so many of the future price predictions for XRP are simply off the charts. According to online prediction markets, XRP has a 41% chance of hitting $4 this year, and a 32% chance of hitting $5. Given that it is currently trading for about $3, that’s more than enough upside for you to hold on and not sell.
Final caveats for investors
Just be aware: Investing in XRP is not for the fainthearted. As noted above, it has been on a roller coaster ride in 2025. The volatility can be intense, and all the hype, buzz, and speculation around XRP can confuse and disorient even the most diligent of investors.
Case in point: In more than a decade, XRP has never traded higher than $4. Yet, many predictions call for it to hit $10, $20, $30, or even $100 in the near future. So, remember to keep your expectations in check.
The most likely upside scenario is that it hits $4 by the end of the year. That’s a 33% return on your money, and certainly worth the investment. But just remember to buckle up before getting aboard the XRP roller coaster.
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Dominic Basulto has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.