A new report from The Motley Fool warns that XRP, despite its strong performance over the past year, could face a sharp reversal in 2026. According to the analysis, key catalysts that propelled the token upward in 2025 are now behind it, setting the stage for a potential drop to $1 in the year ahead.
The forecast comes after XRP outperformed Bitcoin over the trailing year, rising 34%, while Bitcoin declined 14%, as of Nov. 23. But analysts now argue that the fundamentals supporting this rally may not hold going forward.
Why XRP Surged in 2025
The article outlines several major catalysts that contributed to XRP’s strong performance this year, many of which may no longer support the asset in 2026. The most significant driver was the U.S. presidential election, where Donald Trump’s return to office sparked broad optimism across the crypto market.
With Trump perceived as more crypto-friendly than Democratic candidate Kamala Harris, digital assets surged after the November results.
Another major boost came from the resolution of the Ripple vs. SEC lawsuit, ending years of legal uncertainty. The 2023 split ruling, followed by both sides agreeing to drop appeals, effectively removed the largest cloud hanging over XRP.
The approval of spot XRP ETFs further amplified institutional access and investor enthusiasm, enabling funds to directly hold XRP.
Momentum was also supported by increased usage of RippleNet, Ripple’s cross-border payments network, now estimated to be used by more than 300 financial institutions worldwide. With XRP serving as a bridge currency in some of these flows, utility-based optimism grew.
Finally, Wall Street bullishness played a role. Standard Chartered analyst Geoff Kendrick issued a long-term target of $12.50 by 2028, fueling expectations of significant upside.
Analyst Warns XRP Could Lose 50% of Its Value
Despite its strong year, The Motley Fool’s analysis argues that the setup for 2026 is sharply different and far less favorable for XRP holders.
According to the report, the biggest issue is a lack of new catalysts. The legal victory and ETF approval, two of the largest events in XRP’s history, have already played out. With no major developments expected in 2026, the asset may struggle to regain momentum.
The article also challenges assumptions about XRP’s adoption, noting that while RippleNet’s 300+ participating institutions are notable, they pale in comparison to SWIFT’s 11,000+ global banking partners. Analysts argue that XRP may find it extremely difficult to displace SWIFT or take significant market share.
A further complication is that RippleNet does not require XRP to function. While some institutions use XRP as a bridge currency, many do not, weakening the link between Ripple’s enterprise growth and XRP’s token demand.
The analysis also warns that investors may be incorrectly assuming Ripple’s financial success will directly support XRP’s long-term value. Ripple can profit from its payment infrastructure regardless of whether institutions hold or transact with XRP.
Competing Blockchains and Broader Market Risks Add Pressure
The report highlights increased competition in the cross-border payments space. While XRP’s settlement times of three to five seconds remain fast compared to traditional systems, newer networks are now rivaling or surpassing its speed.
Solana processes payments in roughly 400 milliseconds, while Stellar matches or exceeds XRP Ledger settlement times. The final concern centers on macroeconomic danger. Cryptocurrencies have been highly correlated with equity markets throughout the past several years.
With the S&P 500 trading at historically elevated valuation levels, a downturn in stocks could drag digital assets lower, especially more speculative altcoins like XRP. The Shiller P/E ratio, hitting 41.20 in late October, one of the highest readings ever recorded during a bull market, suggests significant correction risk.
According to the report, a stock market pullback would likely trigger a broader crypto market decline and put pressure on XRP’s price.
2026 May Be a Tougher Year for XRP
After a year filled with major wins, from legal clarity and ETF approval to political shifts favoring crypto, analysts warn that XRP may not have the same tailwinds in 2026. Without new catalysts, aggressive competition is mounting, and macro uncertainty is rising.
The Motley Fool concludes that XRP could drop to $1, erasing nearly half its value. For investors, the article signals a sharp contrast between 2025’s ideal setup and what could become a far more challenging landscape next year.