Is Ripple a Good Investment?

Ripple is a centralized cryptocurrency created in 2012 by Bitcoin pioneer Jed McCaleb. The altcoin has gained interest from investors because it’s more than a cryptocurrency—It functions as a peer-to-peer transaction network more effective than SWIFT bank transfers and other existing processing systems in the financial world.

Ripple relies on the consensus algorithm to verify transactions recorded on a distributed public ledger. Initially, it focused on serving financial institutions with its crypto coin XRP and financial network RippleNet. Instead of being designed for commercial purposes alone, Ripple facilitates the transfer of assets globally in a few seconds.

It can be best described as a mediator for settling remittances over RippleNet. Its acceptance by banking systems and conventional financial institutions poses the question: Would investment in Ripple be a good decision?

A Brief Background

Ripple’s value has been rising over the last three years; the rise is because of its token, XRP, that is pre-mined, cheap, and fast. To control its supply and prevent price crashes, Ripple releases one billion XRPs from a total of 100 billion every month. Currently, there are 50 billion XRPs in circulation. 

XRP’s lower price makes it a lucrative investment for small investors. Ripple is favored by multinational banks such as the Bank of America, Barclays, and JP Morgan because of transparent and low-cost transfers.

The coin and the company have seen difficult times. Ripple performed poorly during 2012-2017—but Bitcoin’s boom in 2017 got it back on track. Since then, the token has fared pretty well and once reached an all-time high of $4.

Ripple and XRP are owned by the private, for-profit company Ripple Labs Inc., so your return on investment will highly depend on the company’s corporate performance. With that said, Ripple could be a profitable investment opportunity, provided more and more banks and financial institutions use it to move value across RippleNet.

Why Should You Invest in Ripple (XRP)?

As of January 2021, Ripple stands fourth in the list of the largest cryptocurrencies. Its rising market capitalization indicates growing investor confidence. Another thing that makes Ripple a potential investment is its low denomination: Ripple’s low price enables investors to gain more from small price changes.

While analysts differ whether XRP would become a valuable altcoin or not, historical trends can give us insights. In 2012, XRP began trading at around $0.005 and hit $0.36 in May 2017, and reached an all-time high of $3.84 in January 2018. Considering the coin’s ability to grow rapidly, banks could start using it as a unified bank currency—making it a worthy investment.

Is XRP a Safe Investment?

Cryptocurrencies are highly volatile, and Ripple is no exception. Apart from that, XRP’s complete ownership by Ripple Labs and cooperation with banks give them some amount of control.

Conversely, Ripple has high transaction throughput and security. Its high market cap and periodic supply minimize the risks of a price spike.

Things You Should Know Before Investing in XRPs

Ripple’s monetary value, unlike Bitcoin and Ethereum, is not particularly impressive. Another thing is that it can’t be mined. However, its significant growth over the past few years makes it a viable investment in 2021. Here are a few things you should know before you invest in the coin,:

1. Your trading needs styles.
2. Your risk appetite.
3. Factors driving XRP’s price.
4. ROI in the short and long term—is it sustainable?

Why Ripple Could Grow Immensely in the Next Upcoming Years?

Ripple’s value goes hand in hand with that of other cryptocurrencies, and in some instances, it outpaces the rest. Recently, many cryptocurrency exchanges—CEX to name one—have listed Ripple on their platforms. Ripple’s peer-to-peer transaction capabilities and secure decentralized digital ledger will attract more investors.

The coin’s transaction speeds improve capital flow in a way that’s cheaper than Bitcoin, and more financial institutions and payments providers may adopt it in the future. They would also benefit from Ripple’s exceptional scalability, allowing them to facilitate more transactions quickly. 

The Verdict

Traditional banking systems often struggle with lengthy cross-border transactions and high costs. With Ripple, institutional payment providers find a way out of this long-standing problem. Over 100 financial companies—Standard Chartered Bank, UBS, and MoneyGram are a few examples—use Ripple and RippleNet.For the first-time investors who have an interest in cryptocurrencies should give Ripple a try; its coin’s lower price and stability makes it a worthy investment. There are enough reasons to invest in Ripple, and if the current developments and trends continue, Ripple’s value will grow by leaps and bounds. On a final note, keep these facts in mind, and you would be in a much better position to make up your mind about investing in Ripple in 2021. However, you should also go through Ripple Price Forecast and understand the right time to invest in ripple and further gain a huge return.