Pros And Cons Of Investing In Ripple (XRP)

Last Updated September 29th 2022
12 Min Read

What are the pros and cons of investing in Ripple (XRP)? Ripple isn’t your average cryptocurrency. Instead, it offers something entirely different from every other type of digital currency. Unlike Bitcoin or Litecoin, Ripple is an entirely new kind of payment protocol intended to streamline international and cross-border payments around the world.

And while this presents a solid investment opportunity, you must know what Ripple is, what it does, and any potential red flags to look out for as a speculator. No investment is perfect after all.

Key Points

  • XRP is an affordable solution to cross-border remittance and transactions. It can be used to facilitate transactions across the globe quickly and trouble-free.
  • Ripple has forged partnerships with major banks. They are also moving into developing CBDCs, developing private ledgers based on the public XRP.
  • The SEC’s case against Ripple is problematic. While it looks like Ripple could win, the SEC may employ dirty tactics.

What Is Ripple? 


Ripple is a technology that acts as a cryptocurrency (XRP) and a digital payment network for financial transactions. It was co-founded by computer programmers Chris Larsen and Jed McCaleb and released in 2012 though their US-based company, Ripple Labs Inc.

Ripple effectively exists as three separate but interrelated things.

  • The Ripple Network (or RippleNet). A digital payment network for financial transactions.
  • XRP. The digital currency that works on the Ripple Network.
  • Ripple Labs. The company that develops the Ripple Network, XRP and other blockchain payment solutions for financial institutions.

The idea behind Ripple is to simplify how financial payments are made. Typically, the systems that process financial payments are often overly complicated and fragmented. 

And this often results in costly payments, long waiting times and the added element of unreliability.

Ripple offers an alternative platform that can facilitate cross-border payments which are 100% secure, instant, and practically free. Moreover, Ripple can facilitate payments in every type of money, including cryptocurrencies. 

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Just a couple of years after it released XRP, Ripple Labs was named as one of the 50 Smartest Companies by researchers at MIT University in 2014, which is regarded as one of the best private research universities in the world. 

Slowly but surely banks and other financial organisations began showing an interest in using Ripple’s payment system. Five years later in 2019, more than 200 financial institutions had adopted some of Ripple’s technology.

Today, the RippleNet advanced blockchain is used by a growing network of more than 300 providers spanning 40 countries across six continents.

Some of the biggest adopters of Ripple include American Express, Santander, and US-based money transfer company MoneyGram.

What’s more, there are whispers that VISA and Western Union are seriously considering switching over to the Ripple platform in the not-so-distant future.

For many crypto and financial analysts, Ripple has the potential to replace SWIFT as the number one network for secure, standardised, and reliable global payments.

In fact, that’s precisely what Ripple’s founders are aiming for. In an interview in 2020, Ripple’s co-creator Chris Larsen said:

“It’s going to take some time, it’s going to seem frustrating because government and regulators work in a different cycle [...] XRP can be a replacement for that inefficient (SWIFT) system”.

So, to help you make an informed decision about your next market move, here are the pros and cons of investing in Ripple.

Want to know the pros and cons of investing in Ripple so you can figure out if it is a good idea to invest in XRP? Then you’re in the right place!

The Pros Of Investing In Ripple

pros of ripple

What are the benefits of buying Ripple? 

Lots of crypto analysts and speculators think Ripple has a big future, making it an attractive option for new and established traders. So, here’s a quick look at why XRP is a good investment.

✅ XRP is Affordable

Ripple is cheap compared to its previous high level in 2018! You can pick up a serious amount of Ripple for less than a few hundred dollars, while even a smallish punt of $50 would get you more than 113 coins.

Ripple hit an all-time high of above $3.10 in 2018, but some market analysts believe it will push beyond the $5 barrier within the next 10 year. Other predictions are far more optimistic.

So, given its low price and increasingly mainstream appeal, snapping up some Ripple is a relatively low-risk option with the potential for a big return on investment.

✅ Ripple solves problems and creates opportunities

Ripple solves problems for large financial institutions. It also speeds up the flow of capital, which is excellent for the economy.

But Ripple could work for small business owners, too. If it becomes widely adopted, the Ripple platform will provide millions of sole traders and entrepreneurs with access to the global economy.

✅ Market cap of Ripple

With a market cap of approximately $21.89 billion, Ripple is the world’s sixth-biggest cryptocurrency.

A large market cap is a strong sign of investor confidence and makes the asset more resistant to volatile market cycles or dips.

✅ XRP isn't just another cryptocurrency

Ripple is more than a cryptocurrency or technology, it’s a fully-fledged company!

Ripple Labs Inc has over 500 full-time employees, including public relations and marketing specialists who promote the technology to banks, investors, new users, and the public.

✅ Partnerships and investors

Ripple has perhaps the best backing by financial institutions out of the entire cryptocurrency market. In some circles, it’s more liked than Bitcoin.

Their First major banking partner to use the Ripple Payment Protocol was German bank Fidor, in May 2014, according to Pete Rizzo of CoinDesk.

Today, some of their biggest partners include American Express, Santander and MoneyGram, as mentioned earlier. But that’s just the tip of the iceberg.

✅ Moving into CBDCs

CBDCs are ‘Central Bank Digital Currencies’, and in March 2021, Ripple announced that they are piloting the creation of private ledgers based on the public XRP ledger.

They claim that it can handle tens of thousands of transactions per second and has the potential to reach hundreds of thousands of transactions per second.

It is quite likely that in the future there will be more private endeavours like this. It is also quite possible that many future banks and financial institutions could use a private version of the XRP ledger.

✅ XRP is recovering from SEC case

XRP is right in the middle of recovering from the lawsuit with the US Securities and Exchange Commission.

Back in December 2020, the SEC sued Ripple for selling $1.3 billion worth of XRP tokens illegally, claiming that they were actually ‘securities’ not cryptocurrency.

The XRP lawsuit resulted in Ripple’s price crashing to new lows, right at the moment most other cryptos were surging (e.g., BTC reaching $60k!).

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: Top 10 Growth Cryptocurrencies To Buy And Hold

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The Cons Of Investing In Ripple

cons of ripple


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

❌ There won't be any more new Ripple

There will only ever be 21 million Bitcoins. And while the amount of Ethereum is limitless, the production will slow down over time. This limited supply could push up demand in the future, leading to big price increases and bigger profits for early investors. Ripple is different. All the XRP coins are pre-mined and already in circulation. 

❌ Ripple owns a massive share of 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's a chance the price may be overinflated. 

❌ It's not decentralised

For blockchain purists, XRP isn't a 'real' cryptocurrency. Many argue that it goes against the principles of decentralisation 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 revolutionise the way ordinary people exchange or store value.

Allocation of Altcoins

Unlike Ethereum and Bitcoin, all of Ripple’s XRP coinage is pre-mined, meaning that no more coins will be released to the market. This has resulted in its developers owning a substantial percentage of them (Ripple chairman, Chris Larsen, currently holds almost a third of all XRP), which is a concern, as it runs counter to the idea of decentralisation which is core to the cryptocurrency philosophy.

❌ Strong Rivalry

Ripple’s biggest rival is SWIFT, currently the largest international payment network and the preferred choice of some 11,000 financial institutions. Ripple will need to convince the notoriously Luddite banking sector that its payment protocols offer a better, quicker, and safer solution than SWIFT.

❌ SEC case is still ongoing

Though we mentioned above that things are starting to look good with Ripple’s SEC case, there is still a risk that Ripple could lose. It hangs over Ripple like a grey cloud. 

The SEC, likely under political pressure, may want to make an example out of Ripple which could lead them to take up unfair tactics.

For example, in April 2021 it was revealed in court that the SEC had allegedly sought out incriminating information on Ripple from overseas which violated Federal Rules in the USA.

Unfortunately, Ripple is out of the woods yet.

❌ Ripple and XRP are not the same thing!

As you’ve probably noticed, people often use ‘Ripple’ and ‘XRP’ interchangeably, but there is a very important difference you need to know about.

Ripple, the company, offers a variety of different blockchain services to its partners, but actually, most of these blockchain services do not involve the XRP token.

What this means is that many of us have this incorrect image of all of Ripple’s partners using XRP, when in fact only a small amount of them actually do. Most of Ripple’s partners are looking for blockchain solutions, not to start using XRP.

Therefore, the value of XRP should not reflect Ripple’s success because more Ripple partnerships does not equal more XRP usage!

Conclusion: So Is Ripple (XRP) A Good Investment? 

Most investments come down to the risk vs reward factor. In other words, do the potential rewards outweigh the possible consequences of the risks? Ripple certainly has some risk factors. The founders hold a large number of coins, it's still a long way from challenging its main market rival, and it's not the most popular technology for blockchain purists. 

On the other, Ripple is becoming more and more mainstream and has the backing of some major financial institutions. Plus, the current price is a low barrier of entry for crypto newcomers, as well as a good opportunity for established investors to diversify their portfolio without taking a large amount of value out of other assets. 

Put simply, Ripple (XRP) is a low-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding it to your portfolio.

The real Ripple investing question then, does it really work? If you’re willing to invest the time and energy, then for you, it could well do.

Have you considered investing in Ripple?

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

Will Ripple Be A Millionaire-Maker?

In a sense, it already is as we have discussed, this continues to rise as the application of its payment protocols becomes more widely adopted.

Being a finite resource, the value of Ripple is likely to increase further, as scarcity tends to promote growth in price. Please remember, any investment includes some risk. So only invest what you can afford and do as much research as possible before making a final decision.

Now you know the pros and cons of investing in Ripple. If you’re feeling inspired enough to start investing in XRP, or if this article has provided some extra insight to your existing trading knowledge, you may be pleased to know that eToro provides the ability to trade with crypto assets and CFDs on up to 90+ cryptocurrencies.

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How To Invest In XRP?

There are numerous ways to invest in XRP, the most popular being via a cryptocurrency exchange.

Step 1: Register

Open an account with a reputable broker, such as eToro mentioned above. Typically, with most brokers, you will need to provide your full name, date of birth, and address.

Some brokers allow you to sign up with your Facebook or Google account, which will save you having to enter all your details.

You will likely need to upload a document to verify your identity, such as a government-issued ID card. Once complete, you may need to wait a period of time until they can verify your identity.

Step 2: Make a deposit

To purchase Ripple, you will need to make a deposit. With eToro, it can be in either USD, EUR, or GBP. Payments can be made with debit or credit cards or via alternative payment methods, such as PayPal.

Most brokers also have a minimum deposit amount, such eToro, which requires at least the equivalent of $200.

Step 3: Buy XRP

With your account now fully activated and funded, navigate to XRP and buy Ripple. Note that different brokers may offer different ways in which to buy XRP.

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


Here are some commonly answered questions you might still have.

Will Ripple (XRP) reach $1,000?

It is highly unlikely that XRP will reach $1,000 in the foreseeable future. Most prediction sites are not brave enough to imagine when XRP could reach this point.

Even the most bullish XRP price predictions do not stray far from its current price. For example, Digitalcoinprice’s highest estimate for Ripple is $8 by the end of 2031.

What will Ripple (XRP) be worth in 2025?

By 2025, Ripple could be worth a high of $1.93, according to DigitalCoin, or even $1.66, according to Walletinvestor. At the other end of the spectrum, The Economy Forecast Agency predicts dire lows between $0.21 to $0.29 by 2025.

How much will XRP be worth if it replaces SWIFT?

Over $1,530 per XRP based on the theory that SWIFT handles $153 trillion in transaction volumes and there are 100 billion XRP tokens, according to Bitcoinist.

However, paradiddle, writing on Steemit, goes on to explain that if XRP took over from SWIFT, XRP wouldn’t necessarily absorb its market value. They theorise that if Ripple replaced SWIFT, XRP’s actual value would be closer to $25 per token.

How many banks use Ripple?

Up to 54 banks and financial institutions currently have partnerships with Ripple, according to Indrasish Banerjee, writing for Coinsuggest.

But remember, not all banks that use Ripple products use XRP. Ripple Labs offers several different blockchain solutions, and so it is hard to tell just how many of them use the XRP token.

Further Reading:

Ripple Price Predictions: How Much Will Ripple Be Worth This Year And Beyond?

Is Ripple a Good Investment and Should I Invest in Ripple?

Most Popular Cryptocurrencies In The UK

15 Cryptocurrencies To Invest In That Are Both Cheap And Profitable

Ethereum VS. Ripple: Which One Should Be In Your Portfolio?

Most Popular Cryptocurrencies In The USA