If you had ventured $6,000 into the world's most prominent cryptocurrency Bitcoin around a decade ago, you would be a millionaire today. Bitcoin and the crypto realm have defied all expectations, not merely surviving but flourishing. The token has recently ascended beyond $107,000. Several other cryptocurrencies have also performed admirably and grown to market caps surpassing $100 billion. One such is XRP (XRP -6.94%), which currently holds the fourth-largest market cap in the crypto sector, exceeding $140 billion. If you had invested in XRP a decade ago, there is a possibility that you are a millionaire today. But what about now? Can XRP transform you into a millionaire from the current levels?

Unveiling the Essence of XRP

In 2011, four software engineers - David Schwartz, Jed McCaleb, Arthur Britto, and Christian Larsen - crafted XRP and the XRP ledger, a few years after Bitcoin's launch. These four established the company now known as Ripple, led by Chief Executive Officer Brad Garlinghouse.The purpose of XRP was to address certain inefficiencies in Bitcoin, such as the energy-intensive mining system. While most cryptocurrencies are designed to facilitate digital payments, the founders specifically created XRP to enhance the efficiency of cross-border transfers. The XRP ledger can settle transactions within three to five seconds, handle 1,500 transactions per second, has lower transaction costs compared to Bitcoin, and is more environmentally sustainable.XRP Price data by YCharts clearly showcases these attributes, making Ripple and the XRP ledger appealing to mainstream financial institutions aiming to facilitate cross-border transactions. Nearly 20 financial institutions are collaborating with Ripple. Additionally, Ripple recently launched a US dollar stablecoin called RLUSD. Stablecoins are digital assets pegged to a currency or commodity, enabling them to leverage the features of a digital asset while avoiding the inherent volatility of most cryptocurrencies. RLUSD is reported to require XRP tokens for transaction fees.It is important to note that a maximum of 100 billion XRP tokens can be created. Ripple has locked 55 billion of these in escrow accounts using the XRP ledger, and the network's transaction processing rules determine how these tokens are released. As of October, roughly 38 billion XRP tokens remained in escrow.

Legal Hurdles and the Path to Clearance

In 2020, the Securities and Exchange Commission (SEC) sued Ripple, Garlinghouse, and Larsen for conducting an unregistered sale of securities through the sale of XRP in 2013. Crypto stakeholders closely monitored this case as the outcome could have granted the SEC more regulatory authority over numerous cryptocurrencies if XRP were classified as a security. Many crypto advocates believe that cryptocurrencies should be treated as currencies and overseen by the Commodity Futures Trading Commission (CFTC) rather than the SEC.Last year, a federal judge ruled in favor of Ripple and its founders, but the SEC appealed certain aspects of the decision. However, President-elect Donald Trump's victory has opened the way for a pro-crypto administration starting in January. SEC Chairman Gary Gensler plans to step down once Trump officially takes office, and Trump intends to nominate a crypto advocate, Paul Atkins, to lead the SEC.Many also believe that the pro-crypto administration and the Republican-controlled Congress will pass legislation that clarifies the gray areas that have previously hindered the industry and will promote its growth. The SEC lawsuit has been a cloud over XRP's price until recently. It seems more likely that this case will finally come to an end once and for all. Under Trump, all cryptocurrencies are likely to face a more favorable regulatory environment.

The Millionaire Maker Dilemma

Even if XRP has the potential to make one a millionaire, it is likely to take some time to materialize. Assuming you can make an initial investment of $10,000 and aim for it to grow to $1 million over the next 20 years, this would require a total return of 9,900% or a compound annual growth rate of 25.9% for the next two decades.We must also remember that money is always more valuable in the present. Therefore, $1 million in 20 years is worth less than $1 million today. XRP also faces several challenges, including stiff competition from other cryptocurrencies like Solana, which is said to have the potential to process 65,000 transactions per second, although it has not yet achieved anywhere close to this speed.XRP could potentially be a millionaire maker, but I find it futile to speculate on multidecade price targets for volatile cryptocurrencies. XRP is one of the few cryptocurrencies I have a preference for, and I believe it will continue to rise if Bitcoin does. However, at this stage, it is only worthy of a small speculative investment.