XRP remains one of the largest and most recognizable assets in crypto, yet 21Shares says its actual investment thesis continues to be widely misunderstood.
In a new XRP explainer, the asset manager described XRP as an unusual case where enormous name recognition coexists with confusion over what the asset does, how the XRP Ledger operates, and where Ripple fits into the ecosystem.
“Very few assets are this well known and this poorly understood at the same time,” 21Shares investment strategist Max Michielsen said.
XRP currently trades near $1.07, giving it a market capitalization of roughly $68.5 billion and keeping it among the largest digital assets.
21Shares Separates XRP, XRPL and Ripple
One of the first distinctions 21Shares makes is that XRP, the XRP Ledger and Ripple are not interchangeable terms.
XRPL is the public blockchain network, XRP is its native asset, and Ripple is a private company building products that use or interact with the network. The firm stressed that Ripple remains an important contributor but does not unilaterally control XRPL.
21Shares says more than 150 known validators participate across the wider XRP Ledger network, while transactions typically settle within three to five seconds at a fraction-of-a-cent cost.
That distinction has previously been examined by The Crypto Basic when 21Shares addressed major misconceptions surrounding Ripple’s relationship with XRP and XRPL.
Four Developments Strengthen the XRP Thesis
21Shares identifies four developments that have materially changed the XRP investment case.
The first is regulatory clarity, following the conclusion of the SEC’s long-running case against Ripple in August 2025.
The second is broader institutional access, including regulated investment products that allow investors to gain XRP exposure without directly managing wallets or private keys.
Third is expanding XRPL utility. The network is increasingly being positioned for stablecoins and tokenized real-world assets, with 21Shares citing RLUSD growth and billions of dollars in tokenized assets represented on the ledger.
That institutional expansion is already measurable. The Crypto Basic previously reported that XRP ETPs attracted $253.6 million in Q2 while XRPL stablecoin activity accelerated.
The fourth pillar is supply. All 100 billion XRP were created at launch, with no mechanism for creating additional XRP. Transaction fees permanently destroy small amounts of the asset, although 21Shares emphasizes that this burn is too small to represent a major deflationary force.
The Biggest XRP Question Remains Value Capture
The most important part of the 21Shares assessment is also its main caution.
Growing XRP Ledger usage does not automatically mean growing XRP demand.
An institution using XRP as a bridge asset can potentially hold it for only a few seconds while funds move between currencies. XRP is acquired, transferred and converted again, meaning higher payment volume does not necessarily require institutions to accumulate large long-term XRP balances.
21Shares calls the link between network adoption and XRP appreciation a central open question in the investment case.
This mirrors a wider debate around XRP value capture. The Crypto Basic recently covered David Schwartz’s explanation that transaction-fee use alone is not expected to be a major XRP price driver.
Separate 21Shares research has also stressed that increased XRPL activity does not mechanically create token demand.
21Shares Places XRP Behind Bitcoin in Portfolio Construction
The firm also takes a relatively restrained approach to XRP’s place in an investment portfolio.
Rather than treating XRP as a foundational crypto holding, 21Shares describes it as a satellite position—a smaller, thesis-driven allocation whose potential upside comes with substantial risk.
Bitcoin, by contrast, is presented as the core digital-asset exposure, while XRP becomes a more targeted position for investors specifically convinced that tokenized settlement, institutional payments and stablecoins will scale on XRPL.
The distinction is particularly relevant because XRP has historically experienced drawdowns exceeding 90%, a risk 21Shares explicitly highlights rather than minimizing.
The XRP investment case therefore rests on something more complicated than simply counting transactions. XRPL can become more widely used, but the crucial question for holders is how much of the economic value created on the network ultimately accrues to XRP itself.