If you invested $6,000 in the largest cryptocurrency in the world Bitcoin About a decade ago, you would be a millionaire today. Bitcoin and the crypto sector have overcome all odds not only to survive but also to thrive. The token recently surpassed $107,000. Several other cryptocurrencies have performed well and grown to market caps of over $100 billion. One is XRP (XRP 7.99%)which currently has the fourth largest market capitalization in the crypto sector at more than $140 billion. If you invested in XRP a decade ago, chances are you are a millionaire today. But how about now? Can XRP make you a millionaire from current levels?

What is XRP?

Four software developers, David Schwartz, Jed McCaleb, Arthur Britto and Christian Larsen, developed XRP and the XRP Ledger in 2011, a few years after the launch of Bitcoin. The four founded the company that is now called Ripple and is led by CEO Brad Garlinghouse.

The purpose of XRP was to improve some of Bitcoin’s inefficiencies, such as the network’s energy-intensive mining system. While most cryptocurrencies are designed to promote digital payments, the founders specifically designed XRP to make cross-border transfers more efficient. The XRP ledger can settle transactions in three to five seconds, process 1,500 transactions per second, has lower transaction costs than Bitcoin, and is more environmentally sustainable.

XRP price data from YCharts

These features make Ripple and the XRP Ledger attractive to mainstream financial institutions looking to facilitate cross-border transactions, and nearly 20 financial institutions are partnering with Ripple. Ripple also recently launched a US dollar stablecoin called “ RLUSD. Stablecoins are digital assets pegged to a currency or commodity to leverage the properties of a digital asset without the inherent volatility associated with most cryptocurrencies. RLUSD will reportedly charge XRP tokens for transaction fees.

It is also worth mentioning that a maximum of 100 billion XRP tokens can be created. Ripple has 55 billion of them locked in escrow accounts using the XRP ledger, and the network’s transaction processing rules determine how these tokens are released. In October there were still around 38 billion XRP tokens in the escrow account.

Legal obstacles are likely to be removed

In 2020, the Securities and Exchange Commission (SEC) sued Ripple, Garlinghouse, and Larsen for conducting an unregistered securities sale by selling XRP in 2013. Crypto stakeholders watched the case closely as the outcome could have seen the SEC reveal more Regulatory authority for many cryptocurrencies if XRP were considered a security. Many crypto advocates believe that cryptocurrencies should be treated as currencies and monitored by the Commodity Futures Trading Commission (CFTC) and not the SEC.

A federal judge ruled in favor of Ripple and its founders last year, but the SEC appealed parts of the decision. However, President-elect Donald Trump’s victory paved the way for a crypto-friendly government in January. SEC Chairman Gary Gensler plans to resign once Trump officially takes office, and Trump plans to appoint crypto advocate Paul Atkins to lead the SEC.

Many also believe that the pro-crypto government and Republican-controlled Congress will pass legislation that will clarify gray areas that have held back the industry and help it grow. The SEC lawsuit was, until recently, an overhang for the price of XRP. It is more likely that the case will soon be closed once and for all. All cryptocurrencies are facing a more favorable regulatory environment under Trump.

Is XRP a millionaire maker?

Even if XRP is a millionaire, it would probably take some time to work. Assuming you can make an initial investment of $10,000 and want it to grow to $1 million over the next 20 years, then that would be a total return of 9,900% or a compound annual growth rate of 25.9% for the require the next two decades.

Let’s also remember that money is always worth more in the present, so $1 million in 20 years is less than $1 million today. XRP also faces several hurdles, including strong competition from other cryptocurrencies such as Solanawhich supposedly has the potential to process 65,000 transactions per second, although it hasn’t reached anywhere near that speed yet.

XRP could be a millionaire, but I think it’s pointless to speculate on decade-long price targets for volatile cryptocurrencies. XRP is one of the few cryptocurrencies that I like and I think it will continue to rise as Bitcoin does. However, only a small speculative investment is worthwhile at this point.