Key Points
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XRP's value is soaring after a series of regulatory wins in the U.S.
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Can the cryptocurrency maintain its momentum over the long term?
If you'd bought $10,000 worth of XRP (CRYPTO: XRP) back in 2021, your position would be worth a jaw-dropping $118,000 today, highlighting the life-changing potential of cryptocurrency investing. The S&P 500 would have returned a comparably measly $20,000 during that same time frame.
However, with its market cap now exceeding $138 billion, XRP will find it more challenging to maintain the same explosive momentum as in the past. Let's explore whether recent regulatory wins and increasing institutional adoption could be the key to the cryptocurrency's long-term success.
Investors are getting optimistic again
While XRP is still down roughly 38% from its all-time high of $3.84 (reached in 2018), momentum is picking up -- with the token's price up more than double during the past six months. It isn't hard to see why investors are getting optimistic again. Under the Trump administration, the U.S. government has demonstrated a much softer stance toward the industry.
In March, President Donald Trump signed an executive order directing the U.S. to create a Strategic Bitcoin Reserve and Digital Asset Stockpile to store cryptocurrencies, which the government typically seizes in civil or criminal asset forfeitures. This move would not only help to legitimize these assets, but it could also reduce selling pressure; both the Reserve and the Stockpile would holding the cryptos rather than liquidate them for cash. The cryptocurrency industry has also enjoyed recent wins on the regulatory front.
In March, the Securities and Exchange Commission (SEC) decided to drop its appeal against a favorable ruling for XRP's developer, Ripple Labs, which established that its tokens are not securities when sold to retail investors on public exchanges. While Ripple still faces fines related to its sales of XRP to institutional investors, this decision removes a significant overhang for XRP.
XRP's path to mainstream adoption
XRP's long-term success will depend on its mainstream adoption, both as a financial asset and in real-world use cases. The good news is that it has some advantages over its biggest rivals. While Bitcoin was created to function as a store of value and medium of exchange, XRP targets the potentially lucrative market of international payments, currently served by arguably archaic platforms such as the Society for Worldwide Interbank Financial Telecommunication (SWIFT), which was established in 1973.