The issuer of XRP, Ripple, just got a big outside investment.
Ripple will use the new capital to further develop the XRP Ledger.
The currency will still struggle to grow by several orders of magnitude.
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XRP(CRYPT: XRP) is a globally traded asset that is already near the top of the crypto market by value, with a market cap of around $140 billion. That scale alone makes the dream of buying it now and waking up a millionaire later much harder than it sounds.
At the same time, her story is getting more interesting. Ripple, the company that builds the infrastructure around the XRP Ledger (XRPL), has just attracted a new $500 million investment from Wall Street names, and plans to spend that money pushing deeper into institutional payments, crypto custody, and tokenization of real-world assets (RWA). So the real question is not whether XRP can make you a millionaire on its own, but whether it deserves a place as a serious, long-term wealth builder in a diversified portfolio.
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When people talk about a cryptocurrency as a “millionaire maker,” they’re usually hoping for something like a 100x return on a modest initial stake. If you put $10,000 into a coin and it grows 100 times, suddenly you’re looking at $1 million.
For XRP, the numbers will not cooperate. A 100x move from here would push its market cap into the tens of trillions of dollars, more than the current value of the entire crypto market and rival global asset classes like gold or US equities as a whole. It won’t happen.
In other words, the same attributes that make XRP look like a relatively mature asset and less fragile than other crypto projects also work against the fantasy of a life-changing upside happening overnight. But, if XRP does very well over the next decade, a 3x move or more is very plausible, so it could still be a great option for wealth building.
If XRP is unlikely to be a millionaire maker from current levels, why are some investors still taking it seriously? The answer resides on the infrastructure side of the story, where Ripple is quietly building a whole stack of crypto tools for financial institutions.
In early November, Ripple announced a strategic investment round of $500 million led by Fortress Investment Group and Citadel Securities. The company says the cash will support product development for payments, transfers, stablecoin issuance, institutional crypto custody, and its core brokerage services, all using the XRP Ledger as a backbone. It is therefore very reasonable to expect that XRP will gain more value on the basis of this investment, as its ledger will continue to gain further improvements that will create sources of demand for the currency.
This year, Ripple highlighted new tokenized US Treasury products coming to the registry, and other early deployments in areas such as land registries and private credit platforms, all of which show how real-world assets can migrate over XRPL over time. If institutions continue to adopt those tools and use XRPL as a hub to manage their tokenized assets, XRP will benefit in a few ways.
Some use cases require XRP directly for settlement or payments, which creates a structural demand. Others, like tokenized Treasuries, bring more traffic and liquidity into the wider ecosystem, making the network harder to displace. And the more Ripple bakes compliance features into the protocol rather than leaving them to ad hoc smart contracts, the more the book looks attractive to cautious regulated actors who prefer not to juggle a dozen vendors to meet know-your-customer and anti-money laundering (AML) requirements.
The potential fly in the ointment here is timing and competition. Ethereum, Solanaand a number of other chains are also competing to be the preferred home for tokenized assets, as well as other segments such as decentralized finance (DeFi). If Ripple performs well, its new capital could help it win a significant portion of those markets and unseat XRP along the way. If he falters, that $500 million investment simply buys him more time to pursue a moving target.
With this setup, XRP’s investment thesis looks pretty strong. It’s still a good candidate to be a multibagger investment for those who buy it now, even if it won’t make most people millions. But you still need to be patient and fairly risk tolerant to make this asset work in your portfolio, as it has a long way to go, and the competition will not be sleeping.
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Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.
Is XRP a Millionaire Maker? was originally published by The Motley Fool
