Just a few years ago, it looked like XRP (CRYPTO: XRP) might actually be a millionaire-maker crypto. It had a revolutionary new idea: using blockchain technology to facilitate fast, low-cost international money transfers. And there was a lot of buzz for San Francisco-based Ripple Labs, the company behind the XRP token.

But then came a long, bitter, and confusing court battle with the Securities and Exchange Commission (SEC) that started in December 2020, and it's been downhill ever since. XRP has never come close to returning to its all-time high of $3.84 from January 2018, and is currently trading for a paltry $0.56. But what if I told you that XRP could be on the cusp of a major comeback? There are three catalysts that could generate serious wealth for XRP investors in the future.

Resolution of the SEC case

The first major catalyst is resolution of the court case between Ripple Labs and the SEC, which has been trying for nearly four years to classify XRP as a security. In early August, the case appeared to wrap up, with Ripple agreeing to pay civil penalties of $125 million for improperly selling XRP tokens to institutional investors. The SEC was looking for more than $2 billion in fines and penalties, so XRP investors have been spinning this as a victory for Ripple.

The price of XRP should have skyrocketed on the news, but it has barely budged over the past month. In fact, it's down slightly from early August. You can blame the recent crypto "flash crash" for some of this, but a better explanation might be that there is still a risk that the SEC could appeal the ruling. As a result, investors could simply be waiting for signs of what the SEC might do next before they pile into XRP.

So here's the big picture: If XRP can put its legal and regulatory headaches behind it once and for all, it can get back to business as usual. And that's when the price of XRP could really take off. At a very minimum, XRP could double to $1, which is exactly what it did last summer, when there was a favorable legal development in the Ripple case.

Expansion of the core business

It is important to keep in mind that there is actually a profitable business powered by XRP. Most investors only focus on the international money transfer business, which makes sense, since this is how Ripple Labs originally gained prominence. But during the past few years, Ripple has continually expanded the types of services it can offer financial institutions.

Right now, Ripple has three primary businesses: cross-border payments, digital asset custody, and stablecoins. From my perspective, this last one is potentially the most interesting, because it looks like Ripple is on the cusp of making a major splash with stablecoins. It is now preparing for the launch of its own stablecoin to do battle with the two behemoths of the stablecoin world: Tether (CRYPTO: USDT) and USD Coin (CRYPTO: USDC).

The pairing of the new stablecoin with XRP could be huge from a future growth perspective. For example, Tether has a market cap of $118 billion, making it the third-largest crypto by market cap. USD Coin has a market cap of $35 billion, making it the sixth-largest crypto.

By way of comparison, XRP has a market cap of $32 billion, placing it seventh in terms of market value. Given the billions of dollars involved, this is a huge potential business opportunity, and it helps to explain why PayPal (NASDAQ: PYPL) launched a stablecoin of its own last year.

The IPO dream

Another potential catalyst for XRP would be an initial public offering (IPO) for Ripple Labs. If the company can raise money from investors, then it would have a huge pile of cash that it can use to expand both domestically and internationally. And that means big things for XRP, since it is so central to everything Ripple does. Based on one investment firm's estiamtes, a successful IPO for Ripple could lead to XRP skyrocketing to $7.

Granted, talk of an IPO is very speculative, and it would require the blessing of the SEC. That doesn't seem too likely, given the four-year court battle with the SEC. But one option might be to move more of Ripple's operations overseas, where it could potentially take advantage of a more favorable regulatory jurisdiction to raise capital from investors.

How likely is an XRP comeback?

XRP remains a highly volatile, highly risky, and highly speculative investment. It's not for the faint of heart, especially since so much of its price movement during the past few years has been linked to what's happening in the courts. Moreover, it's not really clear whether XRP can ever get back to business as usual, let alone expand.

That said, it's easy to see how a small investment in XRP might turn into a big gain a few years from now. But just buckle up, because it's going to be a wild ride.

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Dominic Basulto has positions in USD Coin. The Motley Fool has positions in and recommends PayPal and XRP. The Motley Fool recommends the following options: short September 2024 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.

It May Be a Wild Ride, but This Cryptocurrency Could Generate Serious Wealth. Here's Why was originally published by The Motley Fool