XRP Price Outlook: What Investors Can Expect Over the Next 3 Years
Key Points
Price targets of $10 and higher are based on hyper-bullish assumptions about the rapid uptake of XRP as a payment coin.
The failure of the Clarity Act this year dampens any long-range price forecasts for XRP.
Stablecoins are taking over some of the XRP token's functionality, limiting XRP's upside potential.
It's fair to say that price targets for XRP (CRYPTO: XRP) are all over the map. Earlier this year, investors voiced concerns that XRP could dip below $1 and stay there for quite some time. Now, with market sentiment improving, investors think that XRP could be ready to soar as high as $10 within the next few years.
So, which is it: Is XRP dipping below $1, or is it skyrocketing to $10?
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The bull case for XRP
Let's start with the bullish scenario for XRP, as outlined by Standard Chartered (OTC: SCBFY). It calls for XRP to hit a price of $2.80 by the end of this year, and a price of $12.50 by the end of 2028.
Obviously, it's highly unlikely that XRP will hit a price of $2.80 within the next few months. It would need to double in value. Right now, prediction markets are only giving XRP a 20% chance of doing that. So that 2028 price target of $12.50 will most likely need to be lowered closer to $10.
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However, even a target price of $10 is going to require some extraordinary growth from XRP. To help make that happen, Ripple (the fintech company behind the XRP token) has spent billions of dollars on blockchain-based acquisitions. The goal is an end-to-end, blockchain-based payment network for banks and financial institutions, with XRP as the featured token.
That's what makes the recent failure of the Clarity Act so problematic. Ripple spent a fortune on helping to shepherd it through Congress, and it still stalled out. So that could limit the long-term uptake of XRP as a payment coin by banks and financial institutions.
The bear case for XRP
The bear case for XRP is easier to make, and it begins with just a single word: stablecoins. These dollar-pegged cryptocurrencies are taking over from XRP as a payment option, and it's easy to see why. The price of a stablecoin is always $1, while the price of XRP can vary wildly. If you're sending cross-border payments all over the world, which one would you rather use?
Even Ripple has seen the writing on the wall, and is now pushing its own stablecoin, Ripple USD (CRYPTO: RLUSD), as an option for its Ripple payment network. That's what concerns me the most: XRP has become almost an afterthought, as just about everyone gravitates to stablecoins. Value is flowing to Ripple and its stablecoin, but not to XRP.
From this perspective, it's easy to see why the long-run price for XRP might be just $1, which is the price of a stablecoin. Maybe this is being overly cynical, but what if XRP is just a glorified stablecoin at the end of the day?
The hope, of course, is that Ripple (XRP) can regain its mojo after the failure of the Clarity Act. New crypto rulemaking from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) should help, but I wouldn't be surprised at all if XRP is still struggling to hit a price of $2.80 (the same price it was supposed to hit this year) by the end of 2028.
Dominic Basulto has positions in XRP. The Motley Fool has positions in and recommends XRP. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.