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Should we jump on the XRP bandwagon?
There have been dramatic gains in cryptocurrency prices across the board over the past year, even if you factor in the drop we’ve seen in recent months.
Ripple’s native token, XRP, is no different. On June 14, 2020, XRP was trading at around $ 0.191, according to data from CoinDesk. At the time of this writing, it was worth $ 0.884 – that’s more than four times what it was a year ago.
What are Ripple and XRP?
Ripple is a company that wants to use blockchain technology to improve payment processing, primarily for financial institutions.
Its coin, XRP, is one of the ways it does this. XRP is faster, cheaper, and more durable than Bitcoin (BTC). Certainly, that can be said about many digital currencies that followed in the footsteps of the first in and the crypto grandfather.
Where Ripple really stands out is its existing deals with banks and financial institutions. It has more than 300 partnerships of this type, in particular with:
Bank of AmericaAmerican ExpressBanco Santander
Rather than disrupting the banking industry from the outside, Ripple has chosen to work with the major players to integrate blockchain technology from the inside.
Another unusual thing about Ripple is that he has pre-mined all of his coins. Unlike Bitcoin, 100 billion XRP was initially produced. These are gradually put on the market. In contrast, new Bitcoins will continue to be mined until they reach their maximum supply of 21 million around 2140.
The basics of waving
Here’s what you need to know about Ripple in a nutshell:
What it does: Ripple is the financial institution’s cryptocurrency. This is an international network of payment providers that will make transferring money faster and cheaper.Ripple token: XRP.Management team: Brad Garlinghouse, CEO of Ripple, has worked with AOL and Yahoo. Its chief technology officer, David Schwartz, has developed systems for CNN and the NSA. It has 500 employees and offices in nine countries. Launch date: 2012: 2012. Market capitalization: $ 41.7 billion (CoinMarketCap, June 2021). Availability: Many cryptocurrency exchanges in the United States have suspended XRP trading, so you may need to shop around. Ripple and the SEC
At the end of 2020, the SEC announced that it was taking action against Ripple. The case is still ongoing and depends on whether XRP is cryptocurrency or security.
The SEC argues that XRP is a security and should have been registered as such. Ripple argues that it is a cryptocurrency like Bitcoin or Ethereum (ETH), which the SEC has defined as commodities. His lawyers also say the SEC waited too long to bring the case forward. This allowed the company to develop its activity and its clientele for several years before intervening.
It is not known how long the procedure will last. We might see a decision later this year, but Ripple could have this costume hanging over his head for years to come. If Ripple loses, it could decimate the value of the currency and would have a ripple effect for the entire industry.
Should we invest?
If you are a US resident, buying XRP is not easy at this time. Many exchanges took it off the list due to the SEC action. For those who can buy XRP, here are some questions to ask yourself before buying this cryptocurrency:
Do you see the price of XRP rising in the long run? XRP has already quadrupled in the past year, so it’s important to think about how much more it can grow. Some predict that its price could skyrocket, while others believe that there are better types of cryptocurrency available. It is never a good idea to invest if you are only looking for short-term gains. Instead, think about how XRP performs over the next 5-10 years. Are you comfortable with the added risk of the SEC procedure? All cryptocurrency investments are risky, but Ripple’s legal battle is an added risk. Ripple says he will continue and may move to a more user-friendly jurisdiction. But it’s not clear if XRP would actually survive. On the other hand, if the decision is favorable to Ripple, we could see a substantial increase in prices. Are your emergency funds topped up and are your retirement savings healthy? Before investing in a cryptocurrency, make sure you have three to six months of emergency savings. You don’t want to find yourself unable to cover a financial emergency because you’ve tied up your money in crypto. Likewise, saving for retirement should take priority over cryptocurrency investments. Imagine reaching retirement age without enough to support yourself just because you took a punch on a risky cryptocurrency.
Ripple is a worthwhile investment because it has a serious business proposition and a strong management team behind it. But don’t get too carried away by the possibility of quadrupling your money. You might as well lose everything, especially if the SEC case is successful.
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