XRP Has Just Done Something It Hasn't Done Since 2018 And Could Signal A Significant Move From Here

XRP – the cryptocurrency developed by Ripple – is witnessing a spectacular resurgence after many years of being "stuck" due to legal issues. Last year, XRP rose to the sky by 235%, and as we move into 2025, this cryptocurrency continues to hold its bullish momentum with an additional increase of 35%, reaching a new historic peak at 3.84 USD, surpassing the all-time high of 2018. However, looking back at the past, XRP once collapsed more than 90% after reaching its peak at the beginning of 2018, raising a big question: Is history repeating itself? XRP – Innovative Solution for Cross-Border Payments In today's banking world, international money transfers are still slow and costly because banks use different infrastructures. If one bank uses the SWIFT network while the other does not, the transfer process requires intermediaries and takes a long time, incurring costs. Ripple addresses this issue with the Ripple Payments Network, a payment network that enables global banks to transfer money directly to each other almost instantly, regardless of the current infrastructure. In this system, XRP acts as the intermediary currency. For example, a U.S. bank can send XRP to a Japanese bank instead of sending USD, thus saving on foreign exchange conversion fees. When the Japanese bank receives XRP, it can convert it to yen immediately. The transaction cost is only 0.00001 XRP, almost free. Legal Issues – The Shadow That Once Loomed Over XRP With a total supply of 100 billion XRP, Ripple currently holds 41 billion, with the remainder circulating in the market. Unlike Bitcoin – which is mined by the community – XRP is issued and controlled by Ripple, which led to XRP being sued by the U.S. Securities and Exchange Commission (SEC) in 2020 on the grounds of being an unregistered security. The lawsuit has dragged on for many years and has nearly frozen the price of XRP. However, by August 2024, a judge ruled that XRP is only considered a security in certain specific cases – such as when sold to institutions – not when traded on exchanges or used as a means of payment. Ripple was fined 125 million USD, but the market sees this as a victory. The situation became even more promising when President Donald Trump took office earlier this year and appointed Paul Atkins, a supporter of cryptocurrency, as the new head of the SEC. As a result, the SEC withdrew its appeal and reached an agreement with Ripple, helping XRP escape legal troubles. New ETF Creates a Boost – But Will It Be Sustainable? A major driver pushing XRP's price to new highs is the approval by the New York Stock Exchange (NYSE) and the SEC for a leveraged ETF based on XRP futures called ProShares Ultra XRP ETF. Although this fund does not directly buy XRP but only holds futures contracts, many investors expect this to be a stepping stone for an XRP spot ETF (spot ETF) – similar to the journey Bitcoin once experienced. If this happens, new capital will flow strongly into XRP. Hidden Risks and the Ghost of 2018 Despite the positive news, XRP still carries many concerning risks: No need for XRP to use Ripple Payments: Banks can completely use fiat money ( in the Ripple network without needing XRP. This means that the development of the Ripple network does not equate to an increase in the price of XRP. Unlike Bitcoin: Bitcoin is seen as a store of value with a limited and decentralized supply. In contrast, XRP is tightly controlled by Ripple, and its value is easily influenced by internal company events, notably the SEC lawsuit. Recent decline: Since the peak of 3.84 USD, XRP has decreased by 19% as of July 29, indicating profit-taking pressure and investor concerns. If market sentiment continues to be negative, the downward trend may persist, similar to the collapse in 2018. Conclusion: Don't Let the Past Repeat? XRP is supported by a favorable legal environment and expectations for new financial products like ETFs. But that is not yet certain enough to ensure a long-term bullish trend. Investors should be cautious, reassessing the degree of dependence of XRP on Ripple and being fully aware that the growth of the Ripple system does not guarantee profits for XRP holders. When the market is overly optimistic, the risk of a "bubble" cannot be ruled out – and those who experienced the shock of 2018 surely have not forgotten that feeling.