It may be a wild ride, but this cryptocurrency could generate serious wealth

XRP (CRYPTO:XRP)the Ripple blockchain digital currency, has taken its investors on a wild ride since its market debut in 2013. The trading price started at $0.0058893, rose to an all-time high of $3.84 in early 2018, but is now trading at around $0.60.

In other words, a $10,000 investment would have grown to $6.52 million before shrinking back to $1.02 million today. That’s already an incredible 11-year gain, but several catalysts could push the price even higher over the next decade.

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Why has the price of XRP increased over the last decade?

Back in 2012, a startup called Opencoin (now known as Ripple Labs) launched its blockchain-based Ripple payment network. It promoted the network as a faster and cheaper alternative to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment protocol used by most financial institutions.

Ripple claimed its protocol could enable secure, instant and “near-free global financial transactions of any size with no chargebacks,” initially attracting smaller financial institutions such as Travelex Bank, Tranglo and Sentbe. It is primarily used to route real-time payments, transfers and currency exchange transactions.

Ripple subsequently created 100 billion XRP tokens – hoping that its native cryptocurrency could complement or replace its fiat currency transactions – and launched its Initial Coin Offering (ICO) in 2013. 55 billion of these tokens were locked in escrow accounts across the company’s blockchain in 2017 and releases them regularly to stabilize its supply and liquidity.

Most of Ripple’s financial customers have not adopted XRP for their mainstream transactions, but the market’s growing interest in it has Bitcoin (CRYPTO:BTC) and other cryptocurrencies triggered a new wave of investors towards smaller so-called altcoins. This is why the price of XRP reached a record high in 2018.

But in 2020, the US Securities and Exchange Commission sued Ripple, alleging that its ICO and token offerings for XRP were illegal sales of unregistered securities. That lawsuit ended XRP’s rally and drove away the bulls, and rising interest rates exacerbated that pressure by pulling investors away from cryptocurrencies and other speculative investments.

However, the SEC lawsuit ultimately ended in August of this year with a lower-than-expected settlement of $125 million. This ruling removed the biggest short-term headwind for XRP, but its price has remained little changed since this long-awaited victory.

What catalysts could drive the price of XRP higher?

XRP is still held back by unfavorable comparisons to Bitcoin, which the SEC considers a commodity because it can still be mined digitally, and tokens based on it Ethereum (CRYPTO:ETH)that can access smart contracts to create decentralized apps (dApps). XRP can no longer be mined and its blockchain does not support native smart contracts.

The SEC’s approval of the first spot price exchange-traded funds (ETFs) for Bitcoin and Ether earlier this year also suggested that these two “blue-chip” cryptocurrencies were more reliable long-term investments than XRP or other smaller ones Altcoins. High interest rates also limited the growth of the cryptocurrency market last year.

But some of these headwinds could be replaced by tailwinds. To attract more developers, Ripple plans to integrate Ethereum-compatible smart contracts into a new sidechain tied to the XRP ledger. Grayscale also recently relaunched its XRP Trust (after closing it in 2021 in response to the SEC lawsuit) as a closed-end fund (CEF) for accredited investors, and this move could pave the way for the eventual approval and launch of the first XRP Spot price ETF.

Robinhood (NASDAQ:HOOD)which delisted XRP following the SEC lawsuit, recently relisted the token on its commission-free trading platform. Ripple has also integrated XRP into the Federal Reserve’s new instant payments platform FedNow, promoting it as a faster and cheaper alternative to SWIFT and traditional card payment networks. This integration could further stabilize and increase the price of XRP. The Fed’s recent rate cut could reinforce these gains.

XRP will remain a speculative and volatile cryptocurrency, but some green shoots are emerging. Therefore, investors who buy some XRP today and ignore any short-term turbulence could see impressive profits over the next few years.

Should you invest $1,000 in XRP now?

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