Thinking of Selling XRP? Consider This 1 Number First

Impatient crypto investors may be itching to sell their XRP (CRYPTO: XRP) holdings considering that the coin's price is down by around 24% in the last 30 days alone.

But there's at least one key number you need to know and understand before you make a decision about selling this robust cryptocurrency.

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This degree of institutional adoption will make waves internationally

By the end of 2025, approximately 80% of the banks in Japan will have adopted XRP for processing international money transfers.

That sounds like a large proportion, and it is, but it's especially notable because it means that the country with the world's fourth-largest gross domestic product is going to have its financial system geared to transact with XRP, in large part. This, to be clear, is enormously bullish for XRP. Moving forward, whenever the average bank in Japan wants to send an international money transfer to a bank somewhere else, it's going to see if it can do so using the crypto, as that will save it significant fees and enable it to settle the transaction faster than it would be able to by using a legacy transfer system like SWIFT.

It's also a smart reason not to sell the coin right now, as it supports the idea that XRP's investment thesis is valid. As of Feb. 21, the 24-hour volume of XRP trading was $5.6 billion. Each of the transactions that made up that total amount of money moving around incurred some fees which trickled back to the network. Therefore, without changing anything or doing anything at all, each day that passes means more value is accruing into the coin, and thus indirectly into investors' wallets.

And Japan isn't the only country that's going big on XRP, either.

In the U.S., there are active discussions regarding whether to include it in a hypothetical national cryptocurrency repository. If such a repository is ever created, that would doubtlessly encourage many of the country's financial institutions to buy and hold XRP, beyond the numerous banks and other companies that hold some already, among them Bank of America and JPMorgan. With such strong catalysts potentially in the works, selling now could put you on the fast track to fear of missing out (FOMO), and a desire to buy the coin back when it's pricier.

The future is probably even brighter

There are yet more catalysts that could soon spark growth for XRP.

For instance, the Securities and Exchange Commission could soon approve exchange-traded funds (ETFs) holding the coin, which would allow it to enjoy liquidity from the traditional financial market rather than solely from the cryptocurrency market. Such ETFs would thus lead to the generation of even more fees, which Ripple, the business that created XRP, could use to promote the coin even more. And with deeper liquidity, financial institutions across the world would be more drawn to buy and hold the coin, as the combination of cost savings and sufficient bandwidth to process their large transfers without incurring delays or massive currency exchange fees might be too appealing to pass up.

In short, selling the coin right now doesn't make too much sense unless you have a pressing personal financial need for the money. You'd simply lock in a terrible selling price and remove the potential for future gains. Holding onto XRP for at least the next few years, or perhaps even buying more of it to capture the upside from its international adoption are both better ideas.

After all, a short decline over the course of a month doesn't threaten the investment thesis for the coin. And, as those who have held it for a while already appreciate, XRP is an investment that can perform best over the long term as its value-generation mechanism has time to deliver returns.

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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.