After years of lackluster returns, Ripple's XRP token finally broke free in 2025. According to CoinGecko's XRP data, the asset's price has increased by 409.2% since September 2024. XRP has become a strong contender for the best-performing cryptocurrency of the year, drawing significant attention. Despite a substantial price correction in the past few days, the asset's target price may breach the $4 mark following possible interest rate cuts this month. Let's explore further.
Will XRP reach $4 after the rate cut?
As borrowing becomes easier, interest rate cuts typically lead investors to take on riskier investments. There are less than two weeks until the Federal Reserve's next interest rate decision. According to the Chicago Mercantile Exchange (CME) FedWatch tool, there is a 97.6% chance that the Fed will cut rates by 25 basis points. Such a development could lead to a significant surge in XRP's price.
XRP must increase by 41.84% to reach the target price of $4 from the current price level. Although the required increase may seem significant, such a level of increase is not unprecedented for this asset. XRP reached an all-time high of $3.65 on July 18. The asset's price has dropped by 22.7% from the peak in July. If XRP returns to its historical high, it is likely to easily break through the $4 target price.
The U.S. Securities and Exchange Commission (SEC) is also likely to approve the XRP spot ETF at some point this year. The approval of the ETF could lead to a surge in institutional inflows into the asset. Institutional funds have been a major driving force behind this cycle for Bitcoin (BTC) and Ethereum (ETH). XRP may exhibit a similar pattern. Such developments could push XRP's price past the $4 mark.
