Ripple is growing, so why is XRP falling to $0.60?

▲ XRP(Ripple) ©

Despite Ripple's growth, XRP (Ripple) is being sidelined, leading to a forecast that it could fall to $0.60 by the end of 2027. Analysis suggests that the focus of institutional business is shifting from XRP to the dollar-pegged stablecoin Ripple USD (RLUSD).

According to the investment media outlet The Motley Fool on August 9 (local time), Ripple unveiled 'Ripple Mint' on July 23, allowing banks and trading firms to issue and redeem RLUSD. While it is a key infrastructure to support Ripple's global financial business, the role of XRP has been deemed limited.

Previously, the investment thesis for XRP was based on the expectation that as banks worldwide adopted Ripple's financial solutions, both token demand and value would rise. However, due to the nature of banks being reluctant to hold or trade volatile XRP, RLUSD, which is pegged 1:1 to the US dollar, has emerged as a more suitable asset for institutional adoption.

Ripple explained that Mint would bring value and activity to the XRP Ledger (XRPL) infrastructure. However, the announcement focused on how institutions would utilize RLUSD, and XRP was mentioned as a complementary asset to RLUSD. The Motley Fool interpreted this as a sign that XRP's status in the Ripple ecosystem has diminished compared to the past.

At the time of the report, XRP was trading at $1.04, up 1.97% over the day, with a market capitalization of approximately $65 billion. However, the author of the article predicted that if Ripple's business growth centered more on RLUSD than XRP, the token price would experience a long-term decline, potentially falling to around $0.60 by the end of 2027.

However, he drew the line by stating that a target price of $0.60 cannot be certain, as it is difficult to accurately assess the value of cryptocurrencies. While not ruling out the possibility of a significant rebound in the interim, the negative outlook persisted that XRP would trade at a lower price long-term than its current level, regardless of the success of Ripple and RLUSD.

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