Should You Invest in Ripple XRP in 2021? An In-Depth Study

Dec 15, 2020 07:43 PM ET
Should You Invest in Ripple XRP in 2021? An In-Depth Study

In 2012, Ripple Labs Inc. released the cryptocurrency known as Ripple, which also served as a digital payment network that lets you carry out transactions online. Traditional payment processing systems are unnecessarily disjointed and complex, which means the payments often take too much time and can be expensive as well. Ripple, on the other hand, provides a faster and more secure alternative and does not cost you any money.

Here, we shall discuss whether you should invest in Ripple XRP as opposed to the various other digital currencies on the market. We will also explore the future prospects of XRP.

What is the current value proposition of Ripple?

The main purpose of the people who came up with Ripple XRP was to make financial transactions cheaper and more efficient. The scalability of this cryptocurrency is quite laudable as well, given the fact that it is able to process around 1500 transactions every second. RippleNet, a network consisting of money service institutions and banks, aims to make international transactions a hassle-free experience.

Currently, several renowned financial bodies like BAC, SAN, and JPM trust in this cryptocurrency. In 2019, the Dallas-based money transfer organization MoneyGram went into a strategic partnership with Ripple, further strengthening its cause. Following this, several financial institutions belonging to Japan and mainland Europe started using Ripple XRP, thus making it a trusted payment solution worldwide.

Not long ago, the CEO of Ripple Labs sparked a rumor about forming an agreement with ECB after the President of the European bank tweeted about the need for swifter online transactions. This tweet got retweeted by the Ripple Labs chief, causing netizens to speculate about a future partnership.

The question still remains: Does Ripple XRP have what it takes to expand itself in the future? Several experts hold the opinion that the switch to cryptocurrency is just a matter of time as far as the international financial system is concerned. Technologies like Ripple XRP could make such a transformation very likely, through the robustness and security it offers. 

If we consider this to be true, it is quite probable that several financial institutions could form partnerships with XRP. This would make it a popular method for:

  • Carrying digital transactions

  • Creating a solid investment option 

Where does it plan to go from here?

In early October 2020, Ripple Labs made an announcement about entering the money lending industry. Customers can now use ODL on the RippleNet network to borrow money. Transborder payments can be facilitated at a much cheaper rate using this service. Ripple Labs states that smaller companies can expand their trade using this, thus, allowing them to go toe to toe with bigger organizations. 

These companies can now purchase Ripple coins from RippleNet based on credit and will have to pay a certain charge based on what they borrowed. Interesting to note, the organization has recently issued a notification for a job vacancy that has garnered a lot of interest among people. Their requirement for a senior developer suggests an exchange for digital currency might be on the cards.

There is a lot of ambiguity surrounding what it is Ripple Labs is developing, and when they would introduce the new platform. But, in spite of this, investors worldwide started putting their money into XRP after the notification about the job opening, consequently making prices soar by 10% within a couple of days.

Ripple

HDFC, India's largest private sector bank, recently became a member of RippleNet thus joining the already large group of important financial partners. It is not entirely clear whether the bank will be utilizing XRP at once; however, it seems they are ready to try out this technology for international transactions. But, does this mean you can gain huge profits within a short time by investing in this particular cryptocurrency?

How good an investment is Ripple?

XRP price chart

If you are attempting to forecast the movement of Ripple, you should remember there are some unforeseeable elements that the markets are not able to regulate. A splendid instance of this would be the Coronavirus pandemic that has impacted the valuation of financial instruments. 

Due to the above-mentioned factor, the value of several digital currencies went down, and Ripple was one of them. Nevertheless, after depreciating to $0.15, it has managed to recuperate from its diminution to reach its previous value of $0.25. 

A recent study of the Ripple community uncovered the fact that approximately 72% of them hold the belief that XRP's price shall attain the value of $100 in due course. 

XRP price forecast

Some experts have predicted that the value of XRP could reach $0.0479 towards the end of October in the year 2021. The temporary perspective shows more promise, with the value predicted to be $0.525 at the end of 2020.  If it follows this path with some minor adjustments, the price of XRP might soar to $1-$1.5 in the year 2021. 

Should you buy, sell, or hold XRP?

As we can see, most of the forecasts tell us that if you are ready to be patient and make long term investments, you can consider investing in XRP. It is true that several banks are adopting digital currencies, and Ripple's unique position in the market might give it some advantage, but there is some uncertainty regarding whether or not it would get adopted widely. 

Suppose you are a relatively new player in the crypto market. In that case, you may consider investing in it since it offers a much cheaper option in comparison to Litecoin, Ethereum, and Bitcoin. 

Summary

Currently, the market capitalization of Ripple is $25.9 billion, and provided more financial bodies start to adopt its payment protocols, and this should rise by a considerable margin. However, before investing, you should conduct thorough research as there is always a certain degree of risk involved.


Best Forex Robots