The cryptocurrency industry has created a large number of millionaires, and XRP (CRYPTO: XRP) is one of the most notable examples. With a price increase of 25,000% over the past decade, a $5,000 investment would be worth over $1.25 million today. To put it in context, a similar bet on the S&P 500 would have only returned $14,200.

However, now that the easiest money has been made, XRP will struggle to deliver the same level of exponential returns as before. Let's dive deeper to see whether this stock can reach $3 by 2025 or beyond.

What is XRP?

Founded in 2012, Ripple Labs created XRP to address the shortcomings of older platforms like Bitcoin, which was launched three years earlier. Developers realized that blockchain technology is ideal for disrupting the international payments industry, which is currently served by networks considered outdated like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), established in 1973.

SWIFT operates by allowing banks to send secure messages to each other before completing money transfers. XRP developers want to allow users to bypass this process by sending money directly to each other while using the XRP token as a bridge between different currencies.

The reality is that all cryptocurrencies can perform this function. And newer blockchains, such as Solana, may handle transactions even faster than XRP.

However, as a pioneer, XRP has established a level of brand recognition and trust that places it in the same league as other 'blue chip' cryptocurrencies like Bitcoin and Ethereum. And this will be key to attracting risk-averse institutional investors who are finally venturing into this high-risk asset class.

The main growth driver for XRP could come from the easing of regulations across the entire cryptocurrency industry. Under the Trump administration, the Securities and Exchange Commission (SEC) began prioritizing regulatory clarification over enforcement, abandoning legal actions against cryptocurrency organizations, including XRP developer Ripple Labs.

On March 9, the SEC dropped its appeal of a previous ruling that Ripple's sale of XRP to retail investors was not considered an unregistered securities sale (although sales to institutional investors still are). Ripple Labs eventually settled with the SEC, agreeing to pay a $50 million fine, down from the original $125 million penalty imposed last year.

Resolving this regulatory uncertainty could open the door for more XRP-based financial products, such as exchange-traded funds (ETFs), helping this asset reach more investors.

Can XRP reach $3 by 2025?

With a price of $2.24 per unit at the time of writing, XRP seems small compared to other top cryptocurrencies like Bitcoin and Ethereum, valued at $105,404 and $2,649 respectively. But this figure is misleading. XRP's market cap (the value of all units combined) is $130 billion, making it the fourth largest cryptocurrency in the world. And the larger an asset, the harder it is to grow.

With this in mind, investors should remember that XRP is unlikely to replicate the exponential returns seen in the past. Even if it were to increase another 1,000% (to $22.40 per unit), its market cap would exceed $1 trillion. And it's unclear where such high demand would come from. However, the path for XRP to reach $3 (a 34% increase from the current price) seems more feasible.

The combination of a legal victory and a proven brand could help XRP attract more wealthy investors, especially if an ETF is approved this year. That said, while this cryptocurrency appears likely to continue outperforming the overall cryptocurrency industry, investors should expect future growth to be slow and steady, not fast and explosive. And the path to $3 may not necessarily happen by 2025.