Many crypto pundits were ready to write Ripple off when its tussle with the SEC hit the headlines in the second half of 2020. But the so-called bankers crypto appears to have weathered the storm well and the regulatory question marks have done little to diminish its popularity amongst its target market - which includes global banks and major financial institutions.
Ripple was set up to facilitate cross border payments for banks and financial institutions. Effectively, developers sought to leverage blockchain technology to offer streamlined, low-cost and fast currency conversion that would not be possible with the existing standard, SWIFT.
Ripple is undoubtedly an impressive project and one that somewhat goes against the cryptocurrency ethos - it is, in some sense at least, operated by Ripple Labs as a central authority. But potential investors should remember - Ripple is not intended to be a digital currency, as per the likes of Bitcoin or Litecoin.
So is Ripple a good investment? Given the resilience it has shown after its regulatory troubles and its significant potential in the world of traditional finance, we think Ripple could well be one of the top investments for the year. In the following article, we’ll take a look at exactly why Ripple could be the crypto to double your money in 2023.
5 Reasons Why Ripple Could Double Your Money
1. Ripple Is The Bankers Crypto
Launched by Ripple Labs in 2012, the network uses a permission consensus mechanism via a group of servers to confirm transactions, as opposed to the traditional proof of stake or mining-based protocols. This allows the network to process transactions quickly - really quickly. The network is capable of processing around 1500 transactions per second, compared to Bitcoin’s 5 or Ethereum’s 20.
Existing methods of making cost border payments are a major headache for banks. They involve banks having to hold ‘stock’ of various currencies in order to cover transfers and can often involve several institutions. Then there’s the foreign exchange spread to consider. Estimated costs for the average SWIFT transaction stand at around the 11% mark and can take days to settle.
Its speed and cost-effective processing mean Ripple and its native token, XRP, offer the perfect alternative for banks to make such transfers.
Ripple offers more or less instantaneous transfers and removes the need for any foreign exchange to actually take place, as XRP can be used as the exchange medium. Ripple has estimated that the reduced processing time and low network fees could save banks 33% on interdenominational money transfers.
This factor really marks Ripple out as, whereas most cryptocurrencies seek to disrupt the world of traditional finance, Ripple seeks to work in synergy with the world’s major banking institutions. At the time of writing, Ripple had partnerships with several major institutions, including Santander, Canadian Imperial Bank of Commerce, Deloitte and Standard Chartered.
Naturally, this bodes well for Ripple as an investment asset and if support continues to grow, we could see XRP becoming the standard exchange mechanism for banks and big business - which could see the Ripple explode in price in the near future.
Check Out: How Much Will XRP Be Worth In The Next 5 Years?
2. RippleNet
Another reason that Ripple is likely to be a solid investment in future is the technology behind the project. RippleNet is very much fit for purpose. The platform is already being used by major institutions around the world and the more institutions adopt it, the more it is established as the leading alternative to SWIFT.
RippleNet is effectively three services bundled together: xRapid, xCurrent, and xVia. xRapid is the protocol that offers the transferring of cross-border remittances at a much faster rate and lower cost than traditional means. xCurrent complements this by enabling banks to settle cross-border payments with end-to-end tracking in an instant. Finally, xVia, is Ripple’s standard payment interface for paying for services on the network.
The combined services of Ripplenet remove most of the headaches involved in international transfers. For example, there is no need for institutions to load up with foreign currency or establish relationships with other institutions individually. The nature of blockchain means all network participants can exchange funds freely with no prior need to establish trust.
The organisation behind SWIFT has clearly been shaken by the emergence of the Ripplenet protocol. In fact, the Belgium-based organisation actually launched a proof-of-concept (PoC) of a gateway, called gpi Link, to explore the idea of using blockchain technology in its existing gpi payment’s network (which itself was upgraded in response to the Ripple threat). However, SWIFT still insists that blockchain is “not yet mature enough for cross-border payments.”
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3. Ripple Is Currently Very Affordable
Investment is all about growth potential. Realistically, when tokens are hitting the sort of prices that Bitcoin was seeing in April and November of 2021, then sooner or later they have to run out of steam - at least you are unlikely to double your money on coins that are trading at record highs.
This is another reason that Ripple could be a good investment in 2023. XRP has never had an especially high price-per-token, but nonetheless, it has been a couple of years since it reached its record high of $3.40. In fact, for much of the time since, a single XRP token has traded well under the US dollar.
The low price means that investors can acquire a relatively large holding with a comparatively small outlay. What’s more, at the time of writing, Ripple had sunk from its April 2021 high of $1.84 to $0.78. This means that, as the market picks up following the meltdown at the end of last year, XRP has plenty of room to grow.
In fact, most analysts are predicting a strong year ahead for XRP. DigitalCoinPrice, for example, believes that Ripple will recover well over the coming months, climbing to $1.46 by September. TradingBeasts also had a similar forecast, with XRP ending 2023 at $1.25.
Of course, these platforms aren’t predicting that Ripple will double your money in 2023 per se, but given that growth is expected to continue well into 2023, the future certainly looks bright for those choosing to invest in XRP.
Read Also: Why is XRP So Cheap?
4. Ripple Trounces The Competition
It’s fair to say that Ripple isn’t the only blockchain capable of facilitating faster and cheaper inter-currency transfers. In fact, it has a few competitors - on paper at least. But we believe that Ripple stands head and shoulders above the competition when it comes to serving the world’s major banks and financial institutions.
So who are Ripple’s major competitors? Well, firstly there’s the eminently adaptable Ethereum. It certainly has the global reach and technical capability to provide remittance services and OmiseGO is an Ethereum-based project that offers peer-to-peer currency exchange, which on paper could compete in the same space as Ripple.
However, as we have seen, the Ethereum blockchain simply cannot match Ripplenet for transactions speeds - even after the former shifts to a proof-of-stake consensus mechanism.
Then there are Ethereum’s gas fees to consider. Higher fees are an issue that has dogged Vitalk Buterin’s behemoth lately and the network simply cannot offer banks the low fees that Ripple can. When you consider the volume in which banks need to conduct their transactions, this alone puts Ethereum out of the running.
The other major competitor is Stellar Lumens, which was actually co-founded by former Ripple man Jed McCaleb. Unsurprisingly, Stellar operates in a similar way to Ripple, providing fast and cheap cross-border payments. It has similar processing times as well as very low network fees.
In theory, Stellar would be Ripple’s main rival, but in reality, the two projects are targeting completely different markets. Whereas Ripple seeks to work with banks and big business, Stellar focuses on providing low-cost remittance services to people in the developing world.
The reality is that there are few - if any - crypto projects that will appeal to banks on the same level as Ripple, which makes for a very interesting investment opportunity indeed.
Check Out: Is Ripple a Good Investment?
5. The Digital Remittance Industry Is A Big Market
Remittances constitute a big part of the financial world and an industry that is continuing to grow. In fact, according to Facts and Factors, the global Digital Remittance Market in 2019 was approximately $14.5bn and is expected to grow beyond $35.8bn by 2026.
At the time of writing, the industry is still dominated by the likes of Western Union and even PayPal. However, Ripple continues to gain ground and many traditional platforms, such as Transferwise, are now working with Ripple to explore its potential. It seems that many are on board - so long as banks continue to join the Ripple network.
If Ripple can prove its worth, we could start to see more and more apps similar to Santander’s OnePay, running on the Ripple blockchain. As these would all require XRP to run, it should be obvious what this would mean for the price of the cryptocurrency.
Of course, how much headway Ripple can make into the market remains to be seen, but there are definitely signs that it could one day be the go-to platform for remittances, which in turn would make XRP an extremely sought after asset and a cryptocurrency with real, stable value.
Read More: 23 Reasons Why You Should Invest in Ripple XRP Today
Expert Predictions For Ripple
The reasons outlined above would certainly suggest that Ripple has the potential to be a very smart investment in 2023. However, you don’t just have to take our word for it. There are several prominent figures in the finance and crypto industries that are predicting big things for XRP.
“We want to be at the forefront of the merging of finance and technology,” explained Santander’s One Pay FX Chief Technology Officer, Ed Metzger, “customers told us that the international payments process could be better so we partnered with Ripple to explore how blockchain could make transactions faster, cheaper and more transparent.”
Egypt’s largest bank, The National Bank of Egypt, has recently joined forces with Ripple, with Hesham Elsafty, Group Head for Financial Institutions and International Financial Services, commenting that “NBE’s partnership with Ripple will help to improve overall efficiency by enabling NBE to establish new alliances across wider markets with reduced cost and quicker integration time.”
Meanwhile, Ripple’s VP of EU Strategic Accounts, says that “as of now, you can’t easily use cryptocurrencies to pay for goods and services, but there is a clear and growing use case for crypto as a bridge currency. As a bridge between one fiat currency and another, it solves the liquidity issues in cross-border payments, and [Ripple] will be a game-changer.”
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Conclusion - Is Ripple A Good Investment In 2023?
There’s no denying that Ripple has the potential to conquer the remittance market. Gradually, more and more institutions are opening up to the possibility of using blockchain in their operations and it is highly possible we will see a domino effect in action.
If this proves to be the case, Ripple has already established itself as the top platform in the space and has already started gaining momentum, with numerous institutions joining the network. In this sense, we could see a similar situation to what we have with Bitcoin: where Ripple will simply have too strong a foothold to be toppled by any competition.
Of course, this is all conjecture and it’s worth remembering that Ripple Labs aren’t out of the woods with regards to their legal trouble with the SEC. This has already had a significant impact on the price of XRP and could continue to do so for the coming months.
All things considered, we feel that Ripple XRP is a worthy addition to any diverse crypto portfolio and with the price of the token currently fairly low, now could be the best time to buy.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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FAQs
Can Ripple replace SWIFT?
There’s no hiding it, Ripple’s objective is effectively to replace SWIFT as the standard means for banks and financial institutions to send cross-border payments. Whilst SWIFT remains the major operator in the space, more and more banks are exploring Ripple’s potential and there is a very real possibility that it could one day replace SWIFT.
Will Ripple double my money in 2023?
Ripple has recovered well from the SEC regulatory woes that sent prices tumbling through 2021. In fact, many analysts are predicting continued growth throughout 2023. Whilst it might be optimistic to expect Ripple to double your money in 2023, it could nonetheless prove to be a very smart investment.
How do I invest in Ripple?
To invest in Ripple, you’ll need a broker that lists the coin. After the SEC ruling, many exchanges started to delist Ripple, so it isn’t as readily available as many other cryptocurrencies out there. The best approach is to search for reputable brokers that are listing the currency.
What is Ripple used for?
Ripple was set up to offer banks a cheaper way of transferring funds from one country to another. Existing methods require currency conversion and can be expensive and time-consuming. By leveraging blockchain technology and using XRP as an exchange medium, Ripple offers almost instantaneous transfers, which are much more cost-effective than traditional means.