Over the past ten years, cryptocurrency trading has been rising in popularity across the world. People from all walks of life are investing in cryptocurrency, including institutional traders and hedge fund managers. Cryptocurrency is a fresh opportunity for those who cannot invest in the conventional stock market for some reason. However, some traders and investors are a bit hesitant when it comes to putting money in cryptocurrency. If you are in the same boat, you can feel a lot more comfortable if you do a little research. In this article, we are going to find out if Ripple or XRP a good investment. Read on.
First of all, you may be wondering which currency you should invest in since there are tons of viable options out there. Apart from this, there are a number of markets that react differently. You may be familiar with Bitcoin, which has the largest Market share. But if you are a type of investor who believes in diversification, you may consider other opportunities like XRP.
Ripple, a company based in the United States, created a token called XRP. Ripple is on the list of the most popular cryptocurrencies of today. Unlike other coins, it operates differently and comes with a lot of fresh and exciting opportunities for aspiring investors.
What Is Ripple investing?
Investing in XRP is a little different from investing in other cryptocurrencies, such as Bitcoin. In the case of traditional investing, you follow the same decade-old techniques. However, cryptocurrency investment works differently as you don’t have to face any barriers to enter the market.
If you want to invest in cryptocurrency, all you need to do is get a smartphone and a fast internet connection. You can get started with a small deposit to make a trade. On most platforms, you don’t need more than 5 minutes to get started and purchase your desired cryptocurrency.
As far as ripple investment is concerned, you need to understand what sets this cryptocurrency apart from other currencies. Although other cryptocurrencies such as Bitcoin and Etherium focus on a decentralization system, XRP is totally under the ownership of ripple. So, this is an important piece of information that you may find quite interesting.
Ripple aims to present a cryptocurrency that can fill a void in the financial world. According to Ripple, XRP has all that it takes to serve the needs of our banking institutions. Although Bitcoin and other giants have been striving to outdo or replace conventional banks, Ripple aims to introduce a coin that banks can use to transfer money across borders without any problem.
Since there is already a gap in the market, Ripple can tap into this opportunity and get an edge over its competitors. Apart from this, banking institutions can also take advantage of this cryptocurrency and other solutions like this.
The downside is that the market for XRP is quite sensitive to news updates about banking and the regulations of cryptocurrency. When a news update is announced, the market reacts based on the negativity or positivity of the news.
With this in mind, the million-dollar question is, should you invest in Ripple in 2021? Investors are also wondering if this currency will remain on the list of profitable cryptocurrencies. If you want to get an answer to this question, we suggest that you take a look at the performance of the coin in 2020.
Is Ripple A Good Investment?
Although it sounds counter-intuitive, the trajectory of Ripple through 2021 is quite impressive based on the fact that it faced difficult circumstances in 2020 and 2019. As a matter of fact, the year 2019 was a nightmare for the coin as it performs the worst among cryptocurrencies. However, the bright side is that the coin has a lot of room for improvement. . It can go up in value down the road.
If you want to get a better idea of how Ripple will do in 2021, we suggest that you go back a couple of years and analyze the waves of XRP during these years.
In 2012, Ripple introduced XRP with a pre-mined stock of 100M coins. By contrast, Bitcoin appeared in the cryptocurrency world with only 21 million coins. Another point of difference is that it is possible to create more XRP coins, but no Bitcoins can be created anymore.
Soon after its launch, the trading value of XRP was $0.005, give or take. Until 2017, the price curve remained almost flat. During the same period, the crypto industry experienced an incredible boom. For example, the value of Bitcoin touched a peak by the end of 2017. On the other hand, in 2017, the value of 1 XRP token was only $0.40. Over the next six months, the value of one token of XRP settled around $0.20.
After the boom of Bitcoin, the cryptocurrency world witnessed the growth of altcoin. In just 24 hours, the value of one XRP went up by 84%. In other words, it increased to $0.51 from $0.27 in only one day in December 2017. During the following two weeks, the value crossed the $1 mark. At the end of the year, the price of one token was $2.30, which is a 38,000% increase in value.
As they say, what goes up, comes down. In February 2018, the value of XRP came down to $1 per token. After that, it continued to struggle for the next two years, while other cryptocurrencies kept on rising in value in 2020.
Is It A Good Idea to Invest in Ripple in 2021?
So, you have a pretty clear idea of how ripple performed during the past 4 years. Therefore, you need to decide if this coin can provide a good return on investment this year and if you should put your money into it. Before you make a decision, you need to understand a few more parameters. Let’s talk about some of them.
First of all, you need to find out if you can hold your XRP tokens. In other words, you need to find out if this cryptocurrency can cover your needs and wants. Apart from this, it is important to find out what causes the fluctuations in the value of XRP. And you also need to do your homework to find out if Ripple has the potential to disrupt the transaction industry.
The good news is that XRP may be suitable for investors and traders with a different style. If you are a general cryptocurrency enthusiast, it can be a good choice for you as it is just like altcoins. It still has a strong foundation as it is among the top 5 coins in the world of cryptocurrency.
Ripple is a great investment choice for thematic investors since this currency targets mainstream financial institutions. What this means is that those who are thinking of investing in the future of payment and transactions may consider XRP as an ideal investment.
And then there are some factors that have a great impact on the value of these tokens, but they have almost no impact on other cryptocurrencies out there. So, you can use it as a hedging tool if you are thinking of putting money in other currencies.
Last but not least, XRP is extremely volatile, which is why it is an ideal choice for experienced day traders. The thing is that this cryptocurrency offers several short-term trading opportunities for day traders.
If you want to become an XRP trader or investor, the next thing you may want to consider is to find out what influences the market. According to most experts, XRP moves kind of in tandem with other cryptocurrency coins, especially Bitcoin.
Also, another prominent market mover is mainstream adoption. The thing is that the Ripple platform fulfills the needs of a lot of companies and financial organizations in the industry. So, what happens is that when a popular brand or institution adopts this coin, you may expect a considerable rise in the value of this coin.
Since Ripple is just a startup, technological developments provide support for the market. Therefore, we can witness a lot of innovations made by XRP in the near future.
Also, since more than 60% of the tokens are held by Ripple, big changes inside the company may have a considerable impact on the value of the currency.
In the United States, investors may have to wait for a while to find out how Ripple and SEC interact to decide on the future of XRP. At the beginning of 2020, SEC claimed that the company sold a lot of unregistered securities to investors in the United States. Before the story came out, XRP was already doing well in the market. Therefore, we may say that the old coin will continue to rise in value.
Advantages of investing in Ripple
Now, let’s take a look at some prominent advantages of investing in Ripple.
Low cost: In the case of popular cryptocurrencies, you can purchase a fraction of a whole. For example, you can purchase Bitcoin even if you have 10 dollars to invest. By contrast, XRP features a small denomination. Therefore, you can spend a few dollars and purchase several ripple tokens.
Solving a problem: The company created the currency to use the power of blockchain and cryptocurrency to solve a real-world problem. In other words, it can help large financial institutions solve their problems and give a boost to the flow of capital. All of this is good for the economy.
The good news is that even small business owners can benefit from Ripple. As it becomes more popular, the platform can make the global economy accessible for millions of individual traders and entrepreneurs.
Real-world use: XRP has a lot of potential, which is why it can play a lot of different roles in the future.
Major player: As far as the market cap is concerned, Ripple has been among the top three players in the market despite the fact that the value of the coin has been dropping from time to time. So, we can say that it is a quite reliable cryptocurrency for both traders and investors.
A high market cap is an indicator of investor confidence. Moreover, it is a sign that the company is doing well, which is what an investor needs in order to make an informed investment decision.
Potential: Although Ripple is against the decentralization approach followed by most cryptocurrencies, it serves as another advantage for many investors. One reason is that Ripple Labs Inc has more than 500 full-time employees, which includes marketing and Public Relations specialists. The role of these professionals is to promote this technology to potential investors, such as banking institutions, large investors, and the general public.
How Much should you Invest In Ripple?
Just like other cryptocurrencies out there, it is easy to enter the cryptocurrency market and purchase XRP tokens. The good thing about Ripple is that it allows you to get started without depositing a large sum of money.
So, you may be wondering how much you should invest in Ripple. Let’s answer this question.
As far as XRP and Ripple are concerned, you can enjoy a lot more opportunities as the XRP tokens are low-priced. Since the value of each coin is less than $1, you can purchase a lot of tokens even if you choose to invest only $10. This is good news for new investors who don’t have a lot of money to invest in cryptocurrency and earn profit.
In short, if you want to gain some experience in the world of cryptocurrency trading, we suggest that you give a go to XRP. These tokens have a low denomination, but they are quite popular across a number of platforms. Since it has a significant market cap, you can trade it on many platforms. And these platforms allow you to purchase these coins in a few minutes. So, entry is quite easy for new traders.