One analyst argues that XRP could fall below $1 within five years — a prediction that contrasts sharply with the token’s historical price action during previous bull and bear cycles.
However, the argument relies on what the analyst says were catalysts that XRP backers expected would push the price much higher, but which eventually fizzled out.
Triggers have come and gone
Many of the “big” events pointed out by bullish investors have already come and gone, says Motley Fool analyst Johnny Rice. In his view, those moments briefly lifted sentiment and price, but the token later retreated towards levels that seemed closer to where it started rather than sustaining the long-term breakout.
rice points First: the settlement between the US Securities and Exchange Commission (SEC) and Ripple Labs, which provided significant clarity to the token. The decision helped spark momentum, but Rice says it wasn’t enough to create lasting demand.
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He also highlighted the launch of spot XRP exchange-traded funds (ETFs). Early on, this helped drive interest – Rice estimates the total investment was about $1.6 billion. But he says the initial enthusiasm was short-lived.
Rice’s assessment also frames XRP’s performance against recent price history. He notes that the altcoin is down more than 60% from its July high of approximately $3.65.
He adds that the token was also trading well below $2 before the SEC dropped the lawsuit, suggesting that even after the legal burden was removed, the market did not sustain the kind of uptrend that many bulls expected.
XRP Forecast Below $1
One central narrative among bulls is that financial institutions will need XRP to move value across borders, Rice says. The argument is that cross-border banking activity could translate into stronger and sustained demand for the token if adoption continues to expand.
The logic is that Ripple’s technology converts one currency into XRP – the bridge asset – and then converts the XRP into the destination currency. In this context, wider bank adoption should translate into more demand for Ripple (XRP) and, ultimately, higher prices.
This thesis has not clearly materialized in a way that supports bullish price targets, says Rice. He argues that although adoption of the Ripple payments platform continues to grow, the price of XRP has not followed suit.
The analyst describes this disconnect as something that has accelerated over the past year, and explains why demand for cross-border payments may be weaker than many investors assume.
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The central issue, in his view, is that the Ripple stablecoin is “Undermining the demand for XRP” as a bridge asset. If banks have a more attractive alternative to use for cross-border transfers – specifically Ripple’s stablecoin, RLUSD – then the “bridge via XRP” request mechanism becomes less effective.
Rice’s view is not only that Ripple’s business is doing better or worse, but that the source of real incremental demand for XRP may be eroding as RLUSD offers banks another option for bridging value.
The analyst says he believes Ripple is building a thriving payments business and that five years from now it may continue to expand its presence in the industry.
But his ultimate forecast remains bearish: He expects XRP to end up below $1, far from the higher price targets often touted around the idea of XRP becoming a major banking bridge asset.
Featured image from OpenArt, chart from TradingView.com
