Is Ripple (XRP) Too Cheap To Ignore?

Last Updated December 9th 2022
4 Min Read

Invest In XRP Today To Become A Part Of The Growing Ripple Ecosystem.

The top cryptocurrencies are attracting investors looking to diversify their portfolios. Many growing companies are accepting cryptocurrencies as a means of payment, making now a good time to invest in digital assets based on your budget.

Bitcoin, the flagship crypto, has not only been a trendsetter but has also become the de facto standard for cryptocurrencies, inspiring an ever-growing legion of followers and spinoffs. Ripple is one such successful investment alternative to BTC

Ripple is a payment protocol that uses blockchain technology to process international money transfers. It offers low transaction fees and extremely fast processing times, and it has partnered with hundreds of financial institutions that use its technology. Unlike the top cryptocurrencies powered by blockchain technology, Ripple functions on a disruptive model called hash tree. Similar to blockchain technology, XRP uses this futuristic method to record transactions. 

After hitting a record high of $1.33 in November, XRP has encountered a steady slide and is priced at $0.39 at the time of writing. However, its price is expected to grow further in 2022 as enthusiasts predict that the Ripple-SEC case will likely end next year. Therefore, we explore if Ripple has the potential to emerge as the best cryptocurrency investment and if XRP is currently too cheap to ignore. 

Ripple: What Is It, And How Does It Work?

The purpose of RippleNet is to provide fast, cheap, and convenient cross-border transactions for banks. That makes it an alternative to SWIFT, the current international payments system most banks use. There are several advantages Ripple offers for international transactions. Firstly, the average transaction is processed in five seconds. Secondly, the transaction fee is 0.00001 XRP, which was much less than a fraction of a cent even at the token's all-time high in price. Lastly, XRP can be used as a bridge currency, giving financial institutions a cheaper way to trade currencies. They can hold XRP instead of various types of fiat money. 

The XRP cryptocurrency uses a consensus protocol to verify transactions. Validators compare proposed transactions to the most recent version of the XRP ledger and accept legitimate transactions. For a transaction to be verified, the majority of the validators must accept it. 

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Ripple: The Upside 

XRP is one of the largest cryptocurrencies and an independent digital asset. Financial institutions and liquidity providers worldwide tend to settle their finances on this digital currency.

Ripple is the only centralized crypto directly interlinked with the banking community. As a result, it makes sure that worldwide industries adopt it to a greater extent. Another advantage of Ripple’s association with banks is its relative insusceptibility to changing cryptographic money guidelines globally because of its organizations and tie-ups with such monetary establishments.

XRP is also a highly-accessible asset. Global crypto exchanges like Gemini, Coinbase, and Binance allow XRP trading. Essentially, users can quickly deal with this cryptocurrency along with other blockchain enthusiasts ad traders.  

There is no doubt that Ripple will grow higher in the days to come. It generally has no connection with the external market shocks and price volatilities. Ripple stands out from other cryptocurrencies because it has a huge market cap and utilizes consensus ledgers for transactions.

Ripple-SEC Lawsuit 

XRP is right in the middle of recovering from the lawsuit with the US Securities and Exchange Commission. In December 2020, the SEC sued Ripple for illegally selling $1.3 billion worth of XRP tokens, claiming that they were actually ‘securities,’ not cryptocurrency.

The XRP lawsuit resulted in Ripple’s price crashing to new lows when most other cryptos were surging. However, it started to become apparent that the SEC’s case is weak and there is growing optimism that Ripple can win the case. This has put the price of XRP on an upward trajectory which it seems to still be riding.

Don't Miss: Ripple (XRP) Price Prediction

Ripple: The Downside 

Like any investment, putting your money into Ripple is not risk-free. So here is what you should know about the risks of investing in XRP. 

Ripple Chairman Chris Larsen owns around a third of all XRP. Ripple CEO Brad Garlinghouse also holds a significant amount, as do other senior board members. With so much XRP concentrated in just a few hands, there is a chance the price may be overinflated.   

For blockchain purists, XRP is not a 'real' cryptocurrency. Many argue that it goes against the principles of decentralization and economic autonomy. Unlike Bitcoin, which is mined and then exchanged anonymously between users, Ripple was specially designed for the banking and finance industry. Its primary purpose is to solve issues within the banking industry rather than revolutionize how ordinary people exchange or store value.

In Conclusion 

Most investments come down to the risk vs. reward question. In other words, do the potential rewards outweigh the possible consequences of the risks? Ripple certainly has some risk factors. However, it is becoming more and more mainstream and has the backing of some major financial institutions. 

Moreover, the current XRP price is a low barrier to entry for crypto newcomers. Therefore, XRP poses an excellent opportunity for established investors to diversify their portfolios without taking a large amount of value out of other assets. 

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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