XRP Underperformance Explained With 3 Rare Factors

Despite bagging clarity in its securities status in the United States, XRP’s price is relatively underperforming compared to its peers.

XRP price at the moment is trading at $0.6417, up by 3.67% in the past 24 hours. While this mild growth rate is intriguing, XRP’s year-to-date growth of 87.39% is way below expectations. 

This article explores three major reasons behind the relatively poor performance of the digital currency.

Stiff Competition from New Rivals

Despite its legacy status as one of the pioneering digital currencies, XRP’s value proposition now faces threats from some new industry entrants. Besides its role as a payment token, the attractiveness of XRP as an investment is waning as Solana-based tokens, for instance, have taken center-stage in recent times with their insane profits.

The focus has also shifted from XRP to Bitcoin (BTC) and Ethereum (ETH), the two tokens major investment giants have applied to list their spot Exchange Traded Fund (ETF) products.

Regulatory Uncertainty

XRP continues to face regulatory uncertainties despite scoring a big win against the United States Securities and Exchange Commission (SEC) in July this year. 

Though the ruling from Judge Analisa Torres was in favor of XRP, pending settlement talks between the markets regulator and American blockchain payments firm Ripple Labs Inc have lent uncertainty that is stirring uncertainty about the future of XRP.

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Investors are cautious to take any major position regarding XRP until, at least, a definitive end is brought to the more than 3-year lawsuit between Ripple and the SEC.

Streamlined Utility and Lower Adoption

The basic essence of XRP is to facilitate cash transactions seamlessly. While it is serving this purpose well, the evolution of the digital currency ecosystem demands a more robust and diversified offering to position a token as a one-stop for payments and smart contracts-based innovations.

Over the past few months, XRP has maintained close affiliations with innovative protocols emerging from the XRP Ledger (XRPL), including Evernode (EVERS) airdrop and the burning of XRP for Xahau (XAH) token. Despite these trends, XRP remains underutilized, and this is weighing heavily on its overall market performance.