XRP is in a good position – but still faces 3 major challenges.

Investors in XRP (CRYPTO: XRP) currently have reason to be happy. This cryptocurrency has surpassed the $2 mark, with a market capitalization of over $127 billion – becoming the fourth-largest cryptocurrency in the world. Acceptance from financial institutions is also rising strongly, bringing confidence in a bright future for XRP. However, behind that positive picture are three headwinds blowing directly into XRP – and it is these factors that are slowing down the price increase since March. While not fatal, ignoring them is no different from thinking that a strong wind won't slow down a kayak. Let's analyze each challenge and assess the impact on long-term investors.

1. Competition is Becoming More Fierce The first challenge that XRP faces is intense competition from other blockchains and traditional fintech companies. Ethereum is currently the platform accounting for about 126 billion dollars of the total 240 billion dollars of the stablecoin market – positioning it as the default solution for dollar transactions in the world of cryptocurrency. Meanwhile, the XRP Ledger (XRPL), once seen as a pioneer in cross-border money transfers, is now gradually losing its edge. Moreover, traditional payment companies like Visa and Stripe are implementing similar technologies using stablecoin. Visa has just invested in a startup that processes over $12 billion in stablecoin transactions annually, while Stripe is expanding its collaboration with banks to provide similar solutions. The concerning thing is that these companies already own payment systems worth thousands of billions of dollars each year. When they integrate stablecoins into the current system, businesses can easily access it without having to learn how to use a foreign crypto like XRP. Although XRPL still stands out with its fast speed and extremely low transaction fees, the network effects (network effects) are favoring platforms where many partners already have accounts. If Ripple – the issuer of XRP – cannot convince stablecoin issuing organizations to choose XRPL as their platform or secure a national-level agreement with the central bank, then XRP risks being left behind in the race for global payment market share.
2. Unlocking Supply Creates Selling Pressure One of the factors driving the price of Bitcoin is the limited supply – there is no "reserve" waiting to be released to the market. In contrast, XRP has a regular monthly supply release schedule. Ripple is currently unlocking 1 billion XRP each month from the escrow account (. Although 80% of that is typically locked back up shortly after, around 100 – 200 million XRP actually gets added to the circulating supply each period. With a price of about $2.15, this translates to selling pressure of up to $215 million each month. If calculated annually, this supply could reach 1.2 billion XRP – equivalent to 2% of the total circulating amount of XRP currently around 58.9 billion ). Although it is not a high inflation rate, in a market where buyers are more concerned about the "float" of the actual coins circulating in the market rather than the total supply, this is a factor that cannot be overlooked. Moreover, even if this supply is not immediately sold off, its presence is enough to discourage a portion of investors – those who fear being "undervalued" by the new supply.
3. The Retail Investor Sentiment Has Not Recovered Yet The final challenge comes from the market's trust in cryptocurrency, especially from retail investors. According to a Pew Research survey in 2024, 63% of adults in the U.S. reported that they do not trust the safety and reliability of current crypto platforms. Although XRP has some compliance tools suitable for institutions and banks, the fear in public perception remains a major barrier. Another survey in 2022 from Pew showed that 46% of those who have invested in crypto believe that the performance did not meet expectations – indicating a "crypto fatigue" mentality that is prevailing. This causes buying power from the retail investor group to shrink – directly affecting the flexibility and price increase momentum of XRP. This negative sentiment is a form of "gravity" that suppresses the upward trend, even though it is not strong enough to completely collapse XRP. However, if macro conditions remain stable and real-world applications continue to increase, over time, market sentiment will gradually improve. At that point, retail money could return more strongly. Summary: Optimistic but Not Careless XRP is in a strong position, with impressive market capitalization and a clear vision in the field of cross-border payments. However, three challenges – strong competition, pressure from unlocked supply, and negative sentiment from retail investors – are real obstacles. They are not destructive, but they are enough to slow down the price increase if not addressed. For long-term investors, it is important to closely monitor these factors and prepare mentally for adjustment periods while still maintaining confidence in the long-term potential of XRP.