XRP Just Caught Another Huge Break. Here's Why It's a Screaming Buy With $1,000.

Holders of XRP (CRYPTO: XRP) are likely rejoicing: With one of the cryptocurrency's biggest potential problems now in the rear-view mirror, there's reason to believe that plenty of growth is on the way.

Indeed, the coin could even appeal to investors who might have been loath to buy it before. Here's what just happened and why it contributes to making this cryptocurrency a screaming buy, even if you can only commit a relatively small amount of capital like $1,000.

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This good news arrived a bit earlier than expected

Legal problems tend to be a bit of a buzzkill when it comes to cryptocurrencies -- as they are with investments in general -- and XRP is no stranger to them.

Ripple, the company that issues XRP, has been embroiled in a multiyear battle with the Securities and Exchange Commission (SEC), which sued it on the grounds that it had made an unregistered securities offering when it created and sold XRP. The case went through many appeals and legal maneuvers, and along the way, the coin carried an unusual amount of risk as an asset. That doubtless dissuaded many institutional investors from buying it. After all, if a regulatory agency or judge levied a large fine against Ripple, that would sap a significant amount of the resources it has available for developing XRP's chain. Moreover, regulators could perhaps compel crypto exchanges in the U.S. to delist it, which would be even worse.

But on March 19, the SEC dropped its lawsuit against Ripple, slightly less than a month before the final deadline for regulators to make a decision on the case. In doing so, the SEC effectively assented to Ripple's contention that XRP is not a security. The coin will likely still be subject to other regulations, which may be shifting soon. Nonetheless, there is no way to interpret this development as anything other than a major win for XRP.

More conservative investors and financial institutions will be less reluctant to dabble in the crypto. That includes banks and currency exchange organizations that could make use of the coin (or one of the stablecoins on its chain) for its fast and low-cost money transfer capabilities. And Ripple will have a free hand in adding to the chain's feature set, which is likely to attract even more businesses to buy and use XRP, generating demand and raising prices.

There are plenty of other catalysts in store

It's clear that the risks associated with investing in XRP just fell considerably. What makes it an even better purchase right now is that it has plenty of potential upside, even beyond its basic value drivers and the beneficial impact of ongoing technology development for its chain.

As of March 12, nine asset management companies had filed applications with the SEC to issue exchange-traded funds (ETFs) holding XRP. The SEC's move to drop its lawsuit against Ripple makes the approval of some or all of those applications much more likely. Should the ETFs be approved, they will represent a set of strong links between the liquidity available to the chain and the liquidity that's in the traditional financial sector.

In other words, when those asset managers want to offer their ETFs, they'll need to buy XRP, which should drive its price up. They'll also have to sell coins periodically as they manage their holdings, of course. But overall, the volume of trading on the chain will increase, as will the average value stored on the chain, which will mean financial institutions will be able to do large transactions with XRP. The bottom line here is that the ETFs will make XRP a significantly better tool for banks and similar businesses to invest in and use in transactions.

All of that could mesh neatly with the investment thesis for XRP. So, with a handful of opportunities looking increasingly ripe and a major obstacle safely navigated, it's worth investing $1,000 in this coin today. If you can hold it for the next five years, there will be plenty of time for the important catalysts to play out, likely in your favor.

Should you invest $1,000 in XRP right now?

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.