Over the past century, stocks have always been regarded as an investment channel that yields superior returns. Although the journey from point A to point B has not been smooth, Wall Street has proven itself to be a reliable wealth-generating machine.

However, if we narrow our perspective to the last 10 years, the story is completely different. Cryptocurrencies have outperformed stock returns, and the main character is not only Bitcoin but surprisingly XRP – the digital currency developed by Ripple as an international payment bridge.

Three Years – Nearly 700% Growth

In just the past 3 years, the price of XRP has increased nearly 700% – far exceeding the 51% increase of the S&P 500 index during the same period. This increase stems from many compounding factors:

  1. The boost from Donald Trump's victory

    • Trump's re-election is seen as 'good news' for the crypto market, in contrast to Democratic candidate Kamala Harris.

    • More importantly, this means that SEC Chairman Gary Gensler – who is unfriendly towards the crypto industry – will leave his position on the day Trump takes office (January 20).

    • The lawsuit between the SEC and Ripple thus has a chance to conclude quickly, instilling confidence in investors.

  2. Expectations for a spot ETF for XRP

    • If approved, the Spot XRP ETF will allow investors to access XRP directly through the stock market, similar to what Bitcoin once did.

    • When the Spot Bitcoin ETF was approved, the influx of money into BTC created a strong momentum – and analysts expect a similar scenario for XRP.

  3. Practical application value

    • More than 300 global financial institutions are estimated to be using RippleNet for cross-border transactions.

    • The XRP Ledger can validate and complete payments in just 3-5 seconds, with costs being a tiny fraction compared to traditional systems.

    • If XRP becomes the primary bridge currency, demand from institutions will continue to drive the price higher.

Is XRP in a bubble?

Despite the attractive outlook, there are still many warning signs:

  1. Not every organization on RippleNet is required to use XRP.

    • Some banks or financial institutions only use RippleNet's infrastructure without needing to buy or hold XRP.

    • This raises significant questions about investors' expectations of 'strong demand.'

  2. Competition in cross-border payments

    • The XRP Ledger outperforms SWIFT in speed and cost, but is not the only option.

    • Some other blockchains may even process transactions faster than XRP.

  3. Value depends heavily on the Ripple network, not on XRP itself.

    • The actual value and potential profit of Ripple lie in the payment network; XRP only serves as a medium.

  4. Market history warns

    • Cryptocurrencies often move in tandem with the S&P 500.

    • Currently, the S&P 500 is at the highest valuation level in history, only surpassed by the dot-com bubble and 2022.

    • When the stock market bubble burst, drops of 25–50% have occurred – and crypto, being more volatile, could plummet even further.

Conclusion

XRP has clearly benefited greatly from political factors, ETF expectations, and practical application value. However, the risk of a bubble remains when:

  • The actual value is not necessarily sustainable.

  • Competition in payment technology is becoming increasingly fierce.

  • The market for risky assets (both stocks and crypto) is currently at high valuation levels.

For investors, XRP may still be an opportunity, but it needs to be approached with a strict risk management mindset and not overlook the possibility of significant price corrections in the future.