Ripple’s XRP (XRP), the third-largest cryptocurrency by market cap, gained national recognition after President Donald Trump mentioned the “valuable cryptocurrency” alongside BTC, ETH, SOL, and ADA as part of a planned US strategic crypto reserve.

Trump’s executive order on March 6 established a new structure for the altcoins — the Digital Asset Stockpile, managed by the Treasury. 

While the crypto community remains divided on whether XRP is truly as valuable as President Trump suggests, a closer look at the altcoin’s utility is warranted. 

XRP’s potential role in banking

Launched in 2012 by Ripple Labs, the XRP Ledger (XRPL) was designed for interbank settlements. It initially offered three enterprise solutions: xRapid, xCurrent, and xVia, all later rebranded under the RippleNet umbrella. XCurrent is real-time messaging and settlement between banks, xVia is a payment interface allowing financial institutions to send payments through RippleNet, and xRapid, now part of On-Demand Liquidity (ODL), facilitates cross-border transactions.

Only ODL actually requires XRP; the other services allow banks to use RippleNet without ever holding the token. This means bank adoption of Ripple technology does not always drive XRP’s price.

Some of the world’s largest banks have used xCurrent and xVia, including American Express, Santander, Bank of America, and UBS. There is less data on the entities that use XRP-powered ODL service. Known adopters include SBI Remit, a major Japanese remittance provider, and Tranglo, a leading remittance company in Southeast Asia.

XRP’s role in Web3

XRP is also used as a gas token. However, unlike the Ethereum network, where fees go to validators, a small amount of XRP is burned as an anti-spam mechanism.

XRP’s role in Web3 is minimal. Unlike Ethereum, Ripple does not support complex smart contracts or DApps. It offers only basic Web3 functionality, such as a token issuance mechanism and native NFT support under the XLS-20 standard, introduced in 2022.

The XRPL Web3 ecosystem is small. Its modest DeFi sector holds $80 million in total value locked (TVL), according to DefiLlama. XRPL’s tokens have a combined market cap of $468 million, according to Xrpl.to. Most of them are DEX tokens (SOLO) and memes (XRPM), as well as wrapped BTC and stablecoins.

So far, XRPL’s Web3 sector remains niche and trails true smart contract platforms like Ethereum and Solana.

Crypto pundits split hairs on XRP’s role in a strategic reserve

Ripple Labs representatives have long advocated for equal treatment of cryptocurrencies, with CEO Brad Garlinghouse reiterating this on Jan. 27. 

Garlinghouse said,

“We live in a multichain world, and I’ve advocated for a level-playing field instead of one token versus another. If a government digital asset reserve is created—I believe it should be representative of the industry, not just one token (whether it be BTC, XRP or anything else).”

However, not all cryptocurrencies serve the same purpose. Bitcoin’s primary role is to be a “geopolitically neutral asset like gold,” in the words of crypto analyst Willy Woo. XRP’s purpose remains less clear, but few in the crypto space would argue that it could qualify as independent money.

This is primarily due to one of Ripple’s most uncomfortable aspects—its permissioned nature. Unlike Bitcoin or Ethereum, Ripple does not rely on miners or staked tokens to secure the network. Instead, it uses a Unique Node List—a group of trusted validators responsible for approving transactions. While this optimizes speed and efficiency, it raises concerns about censorship, corruption, and security risks.

Bitcoin proponent and co-founder of Casa Jameson Lopp didn’t hold back when discussing XRP’s potential:

“There’s Bitcoin, then there’s Crypto, then there’s Ripple. Ripple has attacked Bitcoin at a level rivaled only by BSV’s lawsuits. Ripple explicitly wants to power CBDCs. They have always been focused on servicing banks. Few projects are as antithetical to Bitcoin.”

There’s no love lost between Bitcoiners and Ripple supporters, especially after Ripple co-founder Chris Larsen partnered with Greenpeace to fund an anti-Bitcoin campaign. 

However, Lopp’s comparison to CBDCs holds some weight, given XRPL’s permissioned nature. It reflects a common view in the crypto community that XRP functions more like a banking tool than a truly independent cryptocurrency.

While the XRPL blockchain sees widespread use in banking, XRP’s utility remains a point of concern. It is underscored by the fact that approximately 55% of the 100 billion pre-mined coins are still held by Ripple Labs. This concentration raises concerns about potential market manipulation and the coin’s long-term stability. 

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Beware of various forms of cryptocurrency scams

Cryptocurrency scams can manifest in various forms, often preying on the lack of regulation and the complexity of blockchain transactions. 

You must be aware of common tactics used in cryptocurrency scams. These include:

• Phishing scams: Attackers send fraudulent emails or messages that mimic legitimate cryptocurrency platforms. Victims may be tricked into providing sensitive information such as private keys or login credentials.
• Ponzi schemes: Promises of high returns with little to no risk lure investors into schemes that eventually collapse, leaving many with significant losses.
• Fake ICOs: Fraudulent projects present a compelling investment opportunity, only to disappear after collecting funds.
• Rug pulls: In decentralized finance (DeFi), developers of a project could suddenly withdraw all funds from a liquidity pool, leaving investors with worthless tokens. This malicious act is called a rug pull, and it typically occurs after a project has gained enough momentum and unsuspecting investors have bought into it. 
• Social media impersonations: Cybercriminals impersonate reputable influencers or customer support accounts. They use social media to solicit investments or send links that compromise security. Always cross-check identities through official channels.
• AI-powered scams: AI-powered scams in the crypto space involve advanced tools like phishing bots, deepfakes and exploit bots, which can automatically create convincing fake messages or manipulate platforms to steal funds. These scams are increasingly sophisticated, making it harder for users to spot fraudulent activities and putting digital assets at greater risk.

Immediate steps: What to do after a crypto scam

If you suspect you have fallen victim to a crypto scam, taking prompt action is crucial. 

Here’s a step-by-step guide on what to do after a crypto scam:

1. Secure your accounts:

• Change passwords and enable two-factor authentication (2FA) on your cryptocurrency accounts.
• Transfer the remaining funds to a secure wallet to minimize further risk.

2. Document the incident:

• Keep records of all communications, transaction IDs and any other relevant details. This documentation will be essential for recovery efforts and legal action against crypto scams, if possible.

3. Report the scam:

• Contact local law enforcement and financial regulatory bodies. Many countries have dedicated cybercrime units that can investigate such incidents.
• File a complaint with consumer protection agencies and report the scam on platforms like the Financial Conduct Authority (FCA) in the UK or the Internet Crime Complaint Center (IC3), a division of the FBI that handles internet-related crimes in the US. You can also report cryptocurrency fraud to Action Fraud in the UK, which will then escalate the case to the National Crime Agency (NCA), which is responsible for investigating major cybercrimes and financial fraud.

4. Seek professional guidance:

• Consult legal experts specializing in digital assets for legal action regarding crypto scams. They can help navigate the complex legal landscape and potentially assist in recovering lost funds.
• Engage cybersecurity professionals who can provide crypto fraud help and advice on strengthening your digital security.

5. Monitor and track transactions:

• Utilize blockchain explorers to trace the movement of your stolen assets. Although cryptocurrencies are designed for transparency, identifying the destination of funds can be challenging without professional assistance.
• Consider reaching out to companies specializing in blockchain analytics for a detailed investigation.

Did you know? Argentine President Javier Milei’s X post endorsing the LIBRA token briefly sent its market cap soaring to $4 billion — only for him to delete it hours later, triggering a crash that wiped out millions in investor funds.

How to report a cryptocurrency scam in the US

Reporting crypto scams in the US can be challenging because responsibility is spread across multiple agencies at the federal, state and local levels. 

Before reporting any scam, keep all transaction records, screenshots, emails and any other communications related to the fraud. Determine if it was a phishing attack, fake investment or another form of fraud. This helps in categorizing the complaint accurately. The next steps in reporting the scam are as follows:

Federal reporting

• FBI’s Internet Crime Complaint Center (IC3): This is one of the primary platforms for reporting online financial crimes, including those involving cryptocurrencies. Although many victims report scams through IC3, feedback is often minimal, underscoring the need for a more responsive system.
• Additional Federal Agencies: Depending on the nature of the scam, you might also consider contacting regulators like the Securities and Exchange Commission (SEC) if the fraud involves investment scams.

State and local authorities

• Local law enforcement: File a report with your local police or cybercrime unit. They can sometimes offer immediate assistance or direct you to specialized resources.
• State regulators: Some states have dedicated offices for financial protection. For example, in California, authorities like the Department of Financial Protection and Innovation (DFPI) have been actively addressing emerging crypto scams, from fake mining schemes to fraudulent investment groups.

Given the fragmented crypto crime reporting system in the US, industry leaders have called for a streamlined, centralized reporting system that not only consolidates data from various agencies but also offers victims a way to track the status of their complaints. While this system is not yet in place, being aware of this need can help you set realistic expectations and encourage further advocacy.

Engage with specialized support

• Legal consultation: Many crypto scams are orchestrated from overseas, making cross-border cooperation essential. A lawyer specialized in cryptocurrency or cybercrime in your jurisdiction could help you navigate the legal system and work with the appropriate agencies. 
• Blockchain analysis firms: Some companies offer forensic services to trace the movement of funds on the blockchain. However, ensure you thoroughly research these firms to avoid further scams.

Is it possible to recover crypto lost in scams?

It’s one of the toughest questions for anyone scammed in the crypto space: Can I get my lost crypto back? Unfortunately, the short answer is that recovery can be incredibly difficult, but it’s not impossible.

Crypto transactions, by nature, are irreversible. Once you send crypto to a scammer’s wallet, no central authority like a bank can reverse the transaction. However, there are still a few steps you can take to attempt recovery and minimize future risks.

First, report the scam by contacting local authorities, such as Action Fraud in the UK or the FBI’s IC3 in the US. While they may not be able to recover your funds directly, reporting the incident creates a record of the scam, which could help in more extensive investigations or lead to action against the scammers in the future.

Crypto exchanges and wallet providers may also be able to assist if the scam involves funds sent to or received by a platform they control. Contact their support team immediately. Although the likelihood of recovery from an exchange is slim, some platforms may freeze accounts or funds related to suspicious activities.

Use blockchain forensics services that specialize in tracing the flow of stolen cryptocurrency on the blockchain. They might help you track where your funds went, and sometimes, this information can be handed over to law enforcement to assist with investigations. However, if your funds were sent to a private wallet or mixed through services designed to obscure transactions, recovery becomes significantly more challenging.

While it may not always feel like there’s hope, acting quickly and understanding the complexities of crypto recovery can make a difference. Remember, the best recovery tactic is prevention; staying informed is your first defense.

Did you know? Elliptic, a blockchain analytics firm, traced funds stolen in the record-breaking $1.5 billion Bybit hack to the North Korean Lazarus Group, which laundered the assets through exchanges like eXch. 

Preventative measures: Avoiding cryptocurrency scams

Preventing future scams is as critical as recovering from one. Avoiding cryptocurrency scams is all about staying informed and cautious. 

Implement the following measures to reduce your risk:

• Do your homework: Before investing in any project or platform, take the time to research. Look into the team behind it, read the white paper and check out reviews from reputable sources. If you can’t find clear, verifiable information or something feels off, trust your instincts and steer clear.
• Stay updated on scam tactics: The tactics used by scammers are constantly evolving. Familiarize yourself with common scams like phishing, AI-powered or impersonation scams. Following crypto news and joining reputable online communities can keep you informed about the latest warning signs.
• Question “too-good-to-be-true” offers: If someone promises sky-high returns with little risk, it’s likely a red flag. In crypto, as in any investment, high rewards usually come with high risks. A legitimate opportunity won’t pressure you with unrealistic promises.
• Verify websites and emails: Scammers often create lookalike websites and send fake emails that mimic trusted services. Always double-check URLs and email addresses, and if something doesn’t match the official website or seems unusual, avoid clicking on any links.
• Secure your digital assets: Treat your crypto wallets like a personal safe. Use hardware wallets for long-term storage, enable 2FA on all accounts and never share your private keys or recovery phrases. Think of your private keys as the keys to your house — keep them secure and private.
• Take your time: Scammers love to create urgency with “limited-time offers” or “exclusive deals.” If you’re being rushed into a decision, pause and do your research. Legitimate opportunities will still be available after you’ve had time to verify the details.
• Diversify your investments: Never put all your money into one asset or project. Diversification helps manage risk and protects you if one investment turns out to be less secure than expected.
• Seek trusted opinions: If you’re unsure about an investment or an offer, ask for advice from knowledgeable friends or community members. Trusted crypto communities and forums can be great for getting second opinions — but always be cautious and cross-check the information.

By staying vigilant, questioning deals that seem too good to be true and taking simple security measures, you can significantly reduce the risk of falling victim to crypto scams. It’s all about being cautious and making informed decisions. Your future self will thank you!

Cathie Wood is one of the most vocal bulls on Wall Street when it comes to the potential of the technology sector. She founded ARK Investment Management, which operates several exchange-traded funds (ETFs) focused on investing exclusively in innovative technologies like cryptocurrency, artificial intelligence (AI), robotics, and more.

In fact, ARK was one of the first firms to win approval from the Securities and Exchange Commission to launch a Bitcoin (BTC 0.22%) ETF last year. Wood and her team are extremely bullish on the world’s largest cryptocurrency, predicting it could soar 1,660% to $1.48 million per coin by the year 2030.

The crypto currently trades at around $84,000, which is 21% below its record high. If ARK’s prediction is right, the recent dip could be a great buying opportunity.

Bitcoin has crushed every other asset class over the last decade

Bitcoin has a market capitalization of $1.6 trillion, which accounts for more than half of the total value of every cryptocurrency in circulation across the industry. If it were a company, it would be the seventh largest in the entire world.

It’s a speculative asset because it doesn’t generate any revenue or earnings, nor does it have a legitimate use case in the real world. Therefore, its value is very hard to pin down.

Nevertheless, it has a series of unique qualities that have led investors to believe it’s a good store of value, like a digital version of gold.

It’s completely decentralized, which means it can’t be controlled by any person, company, or government. It also has a capped supply of 21 million coins, which won’t be fully mined until around the year 2140, so it offers the perception of scarcity. Lastly, as I touched on earlier, it can be purchased through dozens of ETFs from different issuers, allowing financial advisors and institutional investors to own it in a safe, regulated manner.

Those attributes have paved the way for Bitcoin to march to new record highs recently, despite most other cryptocurrencies failing to break above their best-ever levels from 2021 (or in some cases, even earlier).

In fact, had you bought Bitcoin 10 years ago and held on, you would be sitting on a 29,100% return — enough to have turned an investment of $10,000 into $2.9 million! It has obliterated every other asset class over the last decade, from stocks to real estate to gold:

Bitcoin price data by YCharts.

ARK points to eight catalysts that could drive further upside

In a report issued in 2023, ARK highlighted eight potential factors that could drive Bitcoin higher over the long term, but not all of them make sense, in my opinion. For example, it thinks Bitcoin could become the currency of choice in emerging markets, but even after El Salvador became the first country to adopt it as legal tender in 2021, it appears most consumers still aren’t willing to use it (partly because of its volatility).

Moreover, ARK believes individuals with a high net worth will increasingly own Bitcoin because it’s harder for governments to seize than cash and other traditional assets. However, we know the U.S. government alone has successfully confiscated over 200,000 bitcoins, which are worth $17 billion at the current price. So, this particular theory doesn’t really hold water.

With that said, three of ARK’s eight catalysts are somewhat plausible:

• Nation-state treasury: Governments all over the world hold trillions of dollars worth of physical gold, and ARK thinks they will eventually hold some of their reserves in Bitcoin. President Donald Trump recently signed an executive order to establish a Bitcoin reserve for the U.S., and while it technically still needs the support of Congress, the wheels are clearly turning on this idea.
• Digital gold: ARK predicts between 20% and 50% of the money investors normally park in gold could be allocated to Bitcoin instead, because it’s digital and more portable than the precious metal.
• Institutional investment: Wood’s firm believes institutions will eventually allocate a portion of their assets to Bitcoin over time, thanks to its consistent returns. ETFs could accelerate this trend, because they eliminate the risks associated with storing cryptocurrency in digital wallets, which are susceptible to hacks.

Setting my opinions aside for a moment, ARK believes Bitcoin could soar as high as $1.48 million per coin by 2030 based on the eight catalysts it outlined. That would give investors a potential return of 1,660% from where it currently trades.

Wood even went a step further at the Bitcoin Investor Day in March 2024. She said it could surpass ARK’s bullish forecast and reach $3.8 million instead, based on the idea that ETFs could lay the groundwork for institutional investors to allocate 5% of their assets to the cryptocurrency. If she’s right, that implies a potential upside of 4,420%.

Is Ark’s $1.48 million Bitcoin target realistic?

If Bitcoin rose to a price of $1.48 million, it would have a fully diluted market capitalization of $31 trillion. In other words, it would be almost 10 times more valuable than Apple, which is currently the world’s most valuable company with a $3.2 trillion market cap. It would also be worth more than the output of the entire U.S. economy, which was around $29.7 trillion last year.

Does that sound realistic for an asset that produces no revenue, no earnings, and has struggled to generate traction as a currency? For me, the answer is no.

Despite Wood’s enthusiasm for the potential of ETFs, they have attracted less than $100 billion in inflows so far, which is a mere fraction of Bitcoin’s current market cap. Granted, these securities have been available for only one year, but I don’t see a catalyst on the horizon that would cause inflows to accelerate from here — they seem to be slowing down instead.

A more realistic price target might be $942,800 per coin. At that level, Bitcoin’s market cap would be $19.8 trillion, which matches the total value of all above-ground gold reserves right now.

I’m not suggesting this will happen, because I believe gold has more intrinsic value than a digital token thanks to its physical state and because it has been accepted as a store of value globally for thousands of years.

However, if Bitcoin does become universally accepted as the digital alternative to gold, that price target still presents investors with an incredible potential return of 1,020% from here.