XRP started the week with a 4% drop, trading nearly 50% below its all-time high. Despite this, analysts are predicting significant gains for the major altcoin by January 2026, pointing to three key catalysts that could reshape its market trajectory.
A major step toward broader access came with Vanguard’s approval of XRP exchange-traded funds (ETFs). Market expert Sam Daodu from 24/7 Wall St. highlighted the importance of this move, noting it simplifies distribution by allowing Vanguard’s advisors to allocate XRP exposure through regulated ETFs without extra hurdles. He pointed to three interconnected factors now in play: institutional capital flowing in via ETFs, a shrinking supply, and Vanguard’s role in changing how the asset is perceived.
The results of the ETF launch have already been notable, with XRP seeing $1 billion in inflows within the first four weeks—one of the fastest-growing crypto ETF launches to date. At the same time, XRP’s market supply has contracted sharply, falling 45% from around 3.9 billion tokens at the start of 2025 to roughly 1.6 billion by December. This reduction is due to large holders holding onto their tokens, leading to accumulation in whale wallets and the removal of tokens from liquid markets through ETF custody.
With only 1.6 billion tokens available on exchanges, even smaller inflows now carry more weight. Daily ETF purchases of $20–30 million can meaningfully impact the market supply.
The Vanguard XRP ETF launch is particularly significant here, as it locks tokens into regulated custody vehicles that are less likely to be sold frequently. Unlike tokens held on exchanges that can be moved quickly, ETF custody encourages a buy-and-hold approach, creating conditions for gradual price appreciation driven by sustained institutional demand amid a shrinking supply.
Since ETF access was granted late in the year, year-end trading typically focuses on maintaining existing allocations rather than establishing new ones. While the ETF adds credibility to XRP without immediate price pressure, its path to $3 by January will depend on how quickly advisory capital mobilizes, how long supply compression lasts, and overall market stability.
Looking ahead, three scenarios emerge for XRP. The most optimistic one involves advisory capital moving faster than usual, potentially allowing advisors to add small XRP allocations during January’s rebalancing. In this case, XRP ETF inflows could stay strong at $40–60 million daily, while the locked-up supply supports a price rise that could push XRP past $2.25, toward $2.60, and possibly test $3 by month’s end.
A middle-ground view suggests a more conventional institutional timeline. Here, while XRP ETF access gains attention in December, actual allocations might increase gradually, leading to daily inflows of around $20–30 million. Under this scenario, XRP could establish higher lows and break above $2.25, facing resistance between $2.40 and $2.80, with price movements focusing more on future adoption than immediate effects.
Based on Daodu’s conclusions and these conditions, XRP reaching $3 may not happen until the first or second quarter of 2026, rather than being an immediate milestone.Featured image created with DALL-E; chart sourced from TradingView.com.
Frequently Asked Questions
XRP Price Outlook FAQs on a Potential 3 Target by Early 2026
Beginner General Questions
Q What is XRP
A XRP is a digital asset and the native cryptocurrency of the XRP Ledger a blockchain designed for fast lowcost crossborder payments and settlements
Q Why are people talking about XRP reaching 3 by early 2026
A This is a speculative price target based on a combination of factors including potential wider adoption positive legal clarity and historical market cycles Its a prediction not a guarantee
Q Is it realistic for XRP to hit 3
A While possible it is highly speculative Reaching 3 would require a massive increase in market capitalization and a perfect alignment of several bullish factors Investors should always be cautious with price predictions
Q Whats the difference between XRP and Ripple
A Ripple is a technology company that builds solutions using the XRP Ledger and holds a large amount of XRP XRP is the independent digital asset that can be used by anyone with or without Ripple
Factors That Could Drive the Price
Q What are the main things that could push XRPs price higher
A The key drivers are 1 Increased institutional adoption for payments 2 A final clear resolution of Ripples lawsuit with the SEC 3 Broader use of the XRP Ledger for new applications like tokenization and 4 A general bull market in cryptocurrency
Q How does the SEC lawsuit against Ripple affect XRPs price
A Legal uncertainty has been a major overhang A final favorable resolution could remove this barrier potentially boosting confidence and attracting more investors and businesses
Q What role does adoption play in the price
A Fundamental adoption is crucial If more banks payment providers and financial institutions use XRP for liquidity in crossborder transactions it increases realworld utility and demand for the asset
Q Could a Bitcoin bull market help XRP reach 3
A Yes historically altcoins like XRP often rally strongly during broader crypto bull markets If Bitcoin sees significant gains it could create a rising tide