XRP falls 30% year-to-date as Ripple's stablecoin clouds token's future

XRP slid 30% year-to-date to $1.24, extending a 40% decline since May 2025 as Ripple's stablecoin boom raises questions about the token's long-term role.

"Ripple's breakout year may be a double-edged sword for longtime XRP holders," Dana Love, a crypto analyst, said. "The success of RLUSD is creating an awkward dynamic where Ripple's growth no longer translates into XRP price appreciation."

XRP now trades at $1.24, down from a July 2025 peak above $3.50 and roughly 30% lower year-to-date. The token has been range-bound between $1.16 and $1.55 for most of 2026, with a 10% drop in the past week alone. RLUSD, Ripple's USD-pegged stablecoin launched in late 2024, has gained traction as the company's preferred bridge asset for cross-border settlements, a role once considered XRP's primary use case. A $1,000 investment in XRP five years ago would now be worth $1,464, trailing the S&P 500's return over the same period, according to price data.

The shift threatens to decouple XRP's price from Ripple's commercial success. In a bear-case scenario, RLUSD fully replaces XRP as the bridge asset, the narrative collapses, and XRP could trade at $0.40, according to projections. In a base case, the token stays near $1.50. Polymarket data prices the CLARITY Act's passage at 55%, but even regulatory clarity may not restore XRP's utility if RLUSD has already captured its function.

$227 million in shorts sets up squeeze potential

Despite the bearish price action, some traders see opportunity. Short bets outnumber longs by roughly 9-to-1, with $227 million in short contracts clustered between $1.44 and $1.46, according to Coinglass data. If XRP reclaims $1.40 and clears that resistance zone, forced covering could drive a sharp rally. Wallets holding over 10 million XRP now own 68.5% of the total supply, the highest concentration since May 2018, with 91% of recent exchange outflows coming from those whales, per Santiment. The token's RSI sits between 40 and 43, showing bearish momentum but with room before oversold territory.

The CLARITY Act wildcard

The Digital Assets CLARITY Act, which passed the Senate Banking Committee 15-9 on May 14 and was placed on the Senate calendar June 1, could classify XRP as a commodity under its Mature Blockchain Test. That would strip SEC jurisdiction and unlock institutional capital sidelined since 2020. But even passage may not reverse the structural shift: RLUSD, not XRP, is becoming Ripple's settlement tool of choice, and no regulatory bill changes that commercial reality. The White House is pushing for a Senate floor vote before July 4, though Republicans have reportedly shifted to eyeing a post-July 4 timeline given the compressed schedule.

This article is for informational purposes only and does not constitute investment advice.