Pros and Cons of Investing in Ripple, Will It Be a Millionaire Maker?
Pros and Cons of Investing in Ripple, Is it Good to Invest in Ripple?
Learn more about the pros and cons of investing in Ripple pushing you ahead to know if it is a good idea to invest in Ripple.
Ripple just might be the missing piece in your investment portfolio. Here’s why you might consider investing in Ripple, the pros and cons, and what exactly to look for.
Before investing in Ripple, it’s vital that you understand what it is that you’re getting into. Ripple is not just another form of currency, like Litecoin or Bitcoin, but a new kind of payment protocol intended to streamline international and cross-border payments around the world.
Ripple isn't your average cryptocurrency. Instead, it offers something entirely different from every other type of digital currency. And while this presents a solid investment opportunity, it's vital that you understand what Ripple is, what it does, and any potential red flags to look out for as a speculator.
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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.
The systems that process financial payments are often overly complicated and fragmented. This means the payments can be costly, time-consuming, and unreliable. 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 year after it released XRP, Ripple Labs was named as one of the 50 Smartest new Companies by researchers at MIT University, which is regarded as one of the best private research universities in the world.
Then in 2013, banks and other financial organisations began showing an interest in using Ripple's payment system. Five years later, more than 100 financial institutes 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 6 continents.
Some of the biggest name 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 earlier this year, Ripple's co-creator Chris Larsen said:
"XRP can be a replacement for that inefficient (SWIFT) system... It's going to take some time, it's going to seem frustrating at times, but I think we'll get there.”
So to help you make an informed decision about your next market move, here are the pros and cons of investing in Ripple.
The Pros of Investing in Ripple
What are the benefits of investing in 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 the pros of investing in Ripple.
✅ It's Affordable
Ripple is currently trading at $0.26 per coin. In other words, it's 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 200 coins.
Ripple hit an all-time high of above $3.10 in 2018, but some market analysts believe it will push beyond the $1,000 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.
✅ It 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 $25.9 billion., Ripple is the world's third-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.
✅ Ripple 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 employers, including public relations and marketing specialists who promote the technology to banks, investors, new users , and the public.
The Cons of Investing in 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 Ripple.
❌ There won't be any more new Ripple
There will only ever be 21million 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 premined, 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.
Conclusion: So is Ripple 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.
Have you considered investing in Ripple?
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 is 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.
Will Ripple be a Millionaire-Maker?
In a sense, it already is – XRP has a market cap of $30.33 billion at the time of writing and, 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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