Key Points
Ripple continues to find new uses for XRP, which is currently primarily used for cross-border payments.
Ripple is integrating XRP into rapidly growing segments of the financial sector, such as asset tokenization.
XRP would need to grow at a CAGR of 30% over the next five years to hit a price of $4.
Volatile altcoin XRP (CRYPTO: XRP) is down 70% over the past 12 months and trades for just $1. So it's perhaps no surprise that crypto analysts are rapidly downgrading their price targets for XRP.
Just one year ago, XRP seemed to be on a glide path to $10. Today, the growing consensus is that XRP could fall to zero. So, which is the more likely scenario for XRP over the next five years?
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New use cases for XRP
One way to answer that question is to examine XRP's use cases. Right now, XRP is primarily a bridge currency for cross-border payments.
A few years ago, that offered up some tantalizing possibilities; some even conjectured that Ripple, the $50 billion company behind the XRP token, might be able to disrupt the entire global financial system, simply by moving cross-border payments to blockchain rails.
Image source: Getty Images.
But here's the thing: Dollar-pegged stablecoins have exploded in popularity and usurped many of XRP's use cases. Why use a volatile, highly speculative altcoin to move money around the world when you can use a dollar-pegged stablecoin? That helps explain why the price of XRP continues to decline. Once you take away the asset's primary use case, what's left? No wonder some investors think XRP could fall to zero.
The good news is that Ripple continues to find new use cases for XRP that extend its value proposition beyond just cross-border payments. Over the past several years, Ripple has spent over $3 billion on blockchain- and crypto-related acquisitions, all of which could help to fuel a massive recovery in the price of XRP.
For example, Ripple is now promoting the XRP blockchain ledger for real-world asset (RWA) tokenization initiatives. Given that asset tokenization could be a multitrillion-dollar market opportunity, that's a huge potential catalyst for XRP.
The path to $4
So how does XRP transform from a $1 crypto to a $4 crypto? It's really just simple math. XRP would need to grow at a compound annual growth rate (CAGR) of 30% over the next five years to quadruple in value. That's approximately the CAGR of a fast-growing tech company, so it's not entirely out of the range of possibility, given Ripple's $3 billion acquisition binge.
Moreover, $4 is the all-time high for XRP, which it hit back in 2018. In 2025, XRP traded as high as $3.65. So investors know that XRP is more than capable of regaining its former highs. It may take a lot longer than originally thought, but XRP will be a $4 crypto within the next five years.
Dominic Basulto has positions in XRP. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.