Before discussing what trading ripple is all about, let’s have a general understanding of what ripple means. The Ripple cryptocurrency is simply an open system of payment in beta. Ripple’s goal is to allow individuals to break free from different financial institutions like credit card, banks, and other networks that support foster and fee delay. Considering market capital and size, this cryptocurrency is as of September 2020, was the fourth-largest in the crypto world, sitting right behind the USD Tether, Ethereum, and Bitcoin. The Ripple network has billions of dollars worth of cryptocurrency accounted for. Ripple was built as a digital payment network for all kinds of financial transactions and Ripple is also the core owner of Ripple XRP, the crypto coin that inflated its market value 40 times in 2017.
To avoid confusion, Ripple is the network, and the coin is XRP. The frequency of introducing new coins into the system affects the value and rate. In total, there are up to 100 billion XRPs in the world, and Ripple owns only about 60% of these XRPs. If all these valuations are taken into account, it would be worth more than several United States tech setups combined. XRP is majorly tied and owned to a single company- Ripple.
Ripple is constantly investing in its network and influencing partnerships with firms and other financial institutions. Some of the financial institutions have signed on to utilise Ripple in carrying out transactions. Some of these companies include; Cambridge Global Payments, SEB, Star One Credit Union, and BBVA.
As the XRP and Ripple continue to grow, so do the value of the network continue to grow.
Things to consider before trading Ripple
Are you thinking of buying XRP? Well, there are some details you need to know about the coin and it’s network. Getting familiar with these details increases your chances of making lots of money from the cryptocurrency.
XRP is currently one of the biggest digital currencies available. If the name doesn’t sound familiar, then you must have heard about Ripple, well, that’s its developer. Although the cryptocurrency itself is XRP, most people call it by its network name, Ripple; both are used interchangeably.
Having a strong use case and a good profile, alongside working with high-profile companies, XRP has enough room for growth. But there are also several obstacles that could hold XRP back. Before you invest in XRP, it’s advisable you take these few points into consideration:
- XRP is designed for financial institutions
When investing in cryptocurrencies, a major factor you need to consider is the coin’s purpose. Many coins fall short in this aspect, as they don’t have specific purposes or they don’t do anything different from the majority of coins in the crypto world.
XRP is unique in that it’s network is intended for payment services and financial institutions, unlike other cryptocurrencies that are aimed at individual investors. In utilising XRP, financial institutions including banks, transfer money without having to pre-fund their customer’s account in other countries, or have to pay huge foreign currency fees.
- XRP aims at improving international fund transfer
Ripple has successfully positioned itself as a strong competitor to SWIFT, the system banks and other financial institutions utilise for fund transfers. XRP offers a global payment network, RippleNet. This network facilitates cross-border transactions. Financial institutions that make use of RippleNet have the option of using XRP for funds transfer. However, a majority of Ripple’s partners don’t really use XRP because of its volatility.
- Transactions are quite fast and affordable
The two biggest advantages of the Ripple network is that it’s quite fast and the cost of every transaction is low. A standard transaction using Ripple will cost only about 0.00001 XRP. That’s a very affordable rate of a penny at the current XRP price below $1.
Transactions are completed within seconds. Overall, XRP is very efficient when it comes to funds transfer.
- Over 300 financial institutions have partnered with XRP
Ripple has partnered with hundreds of financial companies across more than 35 countries. Some of these financial companies include:
- Bank of America
- Banco Santander
- American Express
XRP still has a really long way to go when it comes to catching its biggest competitor. Putting things into perspective, SWIFT has over 10,000 partners compared to Ripple which has only about 300. However, SWIFT has been in existence since 1970, while XRP was launched in 2012, so we could conveniently say Ripple’s results so far has been encouraging
- Ripple has been in a lawsuit with the SEC
In December 2020, XRP’s network found itself embroiled in a lawsuit. The SEC accused Ripple of selling about $1.3 billion worth of securities which weren’t registered.
The unregistered security that the SEC was talking about is the XRP cryptocurrency. Ripple stood firm, defending itself by simply explaining that XRP isn’t a security. The court case is still in progress. Although, this is a reason why investors should be cautious about buying XRPs. However, it could be a good reason to invest in the coins if you feel the case will go XRP’s way. A favourable outcome for Ripple would lead to a price increase for cryptocurrency. Besides, Ripple is looking to go public via an IPO when it wins the case, this could increase XRP’s price! Looking to buy some XRPs? Visit reputable trading platforms, you can check out here.
The above information does not constitute any form of advice or recommendation by London Loves Business and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be obtained before making any such decision.
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