In 2012, financial technology company Ripple introduced a digital payments network built on the blockchain known as the XRP Ledger. The native digital asset XRP (CRYPTO: XRP) functions as a bridge currency to provide banks and payment service providers with access to fast, cheap cross-border transactions.
Since its introduction, the Ripple payments network has expanded to include more than 80 markets and 100 financial institutions. Yet, while the company has facilitated transactions totaling more than $70 billion, it has hardly scratched its opportunity to disrupt international payments. The European Central Bank estimates cross-border volume will hit $290 trillion by 2030.
With that in mind, XRP is currently the third-largest cryptocurrency with a market value of $143 billion. But that figure could soar in 2025 when (and if) its " Bitcoin moment" arrives.
XRP could soar following the approval of spot exchange-traded funds (ETFs)
In January 2024, the Securities and Exchange Commission (SEC) approved the creation of spot Bitcoin ETFs . Those funds reduce friction for prospective investors by providing a form of Bitcoin exposure free from the complexities and high fees associated with cryptocurrency exchanges.
Spot Bitcoin ETFs during their first year on the market attracted $37 billion in net inflows, which makes their introduction one of the most successful financial product launches in history. And the iShares Bitcoin Trust was the single most successful ETF as measured by net inflows during its first year, according to The Wall Street Journal .
Bitcoin's price has more than doubled in the 13 months since spot Bitcoin ETFs won regulatory approval, and XRP may have a similar "Bitcoin moment" in 2025. At least four asset managers have requested permission to create spot XRP ETFs, including 21Shares, Bitwise, Canary Capital, and WisdomTree. If the SEC approves the applications, XRP could be a huge winner this year.
History says XRP could soar when its legal battle with the SEC is resolved
XRP has another potential catalyst on the horizon. Ripple has been embroiled in a legal battle with the SEC since 2020, but history suggests any remotely positive resolution could send XRP higher. Details concerning the lawsuit include:
Some industry experts think the SEC may drop its case against Ripple. Since the departure of former Chair Gary Gensler, the agency has created a task force that aims to "draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously."
The press release announcing the task force acknowledged that the SEC has relied on enforcement rather than clearly defined rules to "regulate cryptocurrency retroactively, often adopting novel and untested legal interpretations along the way." The statement also made a promise to the cryptocurrency industry: "The SEC can do better."
Of course, there is no guarantee the SEC drops the lawsuit, but any resolution that does not permanently damage Ripple would likely send XRP higher. Its price soared more than 70% during the week following the July 2023 ruling from Judge Torres. Also, resolution of the lawsuit would make the approval of spot XRP ETFs more likely.
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