 ▲ XRP (XRP) / AI-generated image © |
XRP (XRP), which has been cut in half over the past six months and fallen below $1.50, is drawing expectations of a buying opportunity at lower prices. However, a sharp warning has emerged that a closer look reveals the outlook is far from rosy.
According to investment-focused outlet The Motley Fool on February 28 (local time), XRP has dropped more than 50% over the past six months and is currently hovering around $1.35. While some investors may seek to pick a bottom in the downturn, the outlet stressed that it is essential to objectively assess what truly drives XRP’s value before making any purchase decisions.
Ripple, the issuing company, has formed real partnerships with major financial institutions and built an excellent payments technology that genuinely improves the existing banking system. However, the most critical issue is that most large banks adopting Ripple’s technology use the system without touching XRP itself. This fundamentally weakens the long-standing core narrative that institutional demand for XRP will surge.
Although XRP creates value as a bridge asset in cross-border remittances, the primary users of this payment infrastructure are not headline-grabbing global banks but smaller fintech firms and remittance companies. Moreover, when they use the service, funds pass through XRP and are converted almost instantly. Every buy order is effectively matched with a sell order, generating substantial trading volume on the surface, but there is no sustained buying pressure from institutions accumulating XRP for the long term.
Adding to the challenge is the strong competitive threat posed by stablecoins. Ripple has recognized this trend and is positioning its own stablecoin, RLUSD, at the forefront of its ecosystem. This strategic shift could ultimately cannibalize XRP’s role as a bridge asset.
In conclusion, while Ripple as a company may thrive as a payment infrastructure provider, its success does not necessarily translate into a rise in the price of the XRP token. The outlet advised that despite XRP’s seemingly attractive price level, its structural limitations make it prudent to avoid buying the token for now.
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