XRP (CRYPTO: XRP), the cryptocurrency formerly known as Ripple, has been one of the hottest tokens. The crypto has surged 287% over the last month.
The incredible gains have pushed XRP’s market capitalization up above $139 billion, and the token now ranks as the world’s fourth largest crypto by market cap — trailing only Bitcoin, Ethereum and Tether. But while XRP now seems to be on the ascent, there were long periods when uncertainty surrounding the cryptocurrency kept its valuation at much lower levels. Investors who were willing to embrace high levels of risk and hold for the long term wound up scoring big wins.
A $10,000 investment in Ripple five years ago would have generated huge returns
While XRP has seen some big swings over the last half-decade of trading, the token’s recent gains have been incredible. If you had invested $10,000 in the token five years ago and held on to your position, you’d have a massive winner on your hands.
With gains of 987% over the last five years, a $10,000 initial investment in Ripple five years ago would now be worth more than $108,000. The cryptocurrency has recently seen explosive gains thanks to expectations that the incoming Trump administration will support the crypto industry and create a more favorable regulatory backdrop. This would be a particularly beneficial development for XRP.
The token has seen its valuation pressured by an ongoing lawsuit brought against Ripple Labs by the Securities and Exchange Commission (SEC), which alleges that XRP was offered as a security rather than a crypto token. With the change in presidential administration and current SEC leader Gary Gensler set to step down from his position, the lawsuit issue could soon be a problem of the past.
Investors should approach XRP with the understanding that the cryptocurrency is a high-risk, high-reward play with a highly speculative outlook, but political and regulatory dynamics appear to be shifting in the token’s favor.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum and XRP. The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
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