Want $10,000? Invest $2,500 Into XRP (Ripple) and Wait 4 Years.

If you can find an investment that you think can quadruple your money, it's a no-brainer to buy it, even if you need to wait a few years. In that vein, there's a real chance that investing a total of $2,500 in a major cryptocurrency like XRP (CRYPTO: XRP) could, over the long term, become worth as much as $10,000.

Here's how to make this play.

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The money gets made in the waiting

First, let's disabuse ourselves of any notions that buying any quantity of XRP is going to make you get rich quickly. That's doubly true if you won't have the spine to hold on to it during a downturn or an upswing. No matter how strong the investment thesis for this coin is -- and we'll get to precisely how strong in a minute -- it needs time to play out.

Now, let's entertain another thought and add some perspective. If you bought $2,500 worth of XRP five years ago, in early 2020, you now would have a pile of cash worth more than $21,000, or nearly 750% more than what you had at the start. The reason for that was the rising adoption of XRP by banks, governments, and other financial institutions because of the coin's fast and low-cost processing of international money transfers.

What's more, those same drivers are still in play today, as well as a few new ones. As more users adopt XRP as their standard for cross-border payments, there's more demand for the coin, and it generates more usage fees for reinvestment into network upgrades and business development needed to gain more users. Today, it's even possible that the coin will be included in a proposed U.S. cryptocurrency reserve, which would be a major catalyst.

But that does not mean that if you committed your entire $2,500 to XRP today that your investment would rise in value linearly during the coming years, or even that it would steadily gain value as XRP's capabilities deepened and its adoption continued. Take a look at this chart:

XRP Price data by YCharts

Notice anything? This coin does not deliver returns in a consistent way. Buying during the very peak of its price, when there are many articles describing how great of a purchase it is and how the price will continue to rise forever, is a strategy that will leave you holding on to an underwater investment for a few years.

Therefore it isn't enough to have patience if you want to invest in XRP. You also need to understand crypto's cyclical nature.

Is this really possible?

Looking at the chart up above should probably prompt you to ask some hard questions, such as whether it is likely for your investment to surge in value in a relatively short time.

If you buy XRP right this minute, at the moment of maximum temptation, it is not very likely. You will likely need to hold your tokens during a prolonged downturn, which is inevitable at some point in the next couple of years. There doesn't need to be anything that undermines the investment thesis for XRP for this downturn to occur; it could just as easily be a sector-wide decline for crypto prices, which is something that tends to happen with some regularity.

At the same time, timing the market is not something to try to do as a strategy, even if you think the potential upside makes it worthwhile. Take temptation out of the loop.

Instead, split your $2,500 investment into a series of $250 purchases each, dollar-cost averaging by buying XRP once per month for 10 months. That way, you'll blunt the impact of buying at higher prices by mixing in purchases at lower prices, when those inevitably return, while also avoiding the need to time the market.

If you follow that strategy and remain patient, within four or five years it is very likely that you'll have made a significant amount of money on your XRP investment. If the coin continues to gain traction, there's no reason it won't reach past all-time highs and surpass them.

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*Stock Advisor returns as of February 3, 2025

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.