Ripple Price Analysis for 2021 (In-Depth Review)
XRP Price Forecast for 2021
We’ll be sharing the top Experts predictions for Ripple in 2021.
Read our Ripple XRP Price Analysis for 2021
Cryptocurrency continued to ingrain itself in the public consciousness throughout 2020, with a record number of new wallets being opened over the course of the year. However, despite there now being thousands of tokens in existence, most casual investors can name just a handful.
Aside from Ether and Bitcoin, one name that comes up, again and again, is Ripple. Launched in 2012, Ripple’s native cryptocurrency, XRP has firmly established itself as one of the top tokens in the industry and at the time of writing, it was the fourth-largest cryptocurrency in terms of market capitalisation.
Often dubbed the “bankers’ crypto”, Ripple acts as both a cryptocurrency and a digital payment network for financial transactions. The name Ripple actually refers to the company that set up RippleNet, a payments network aimed at facilitating international payment settlement and asset exchange for financial institutions. The native token that runs on the system is XRP - which is often confusingly known as Ripple - and it is this which forms the subject of our Ripple price analysis for 2021.
The last twelve months have been an interesting time for XRP. It started the year trading at around $0.19 and continued to climb steadily until the COVID-19 pandemic struck and threw the financial markets into disarray. Since then the value of XRP has fluctuated significantly. It rallied at the end of the year before legal issues saw gains wiped out almost overnight, sending it back to more or less the same price it traded at in January 2020.
So is Ripple still a good investment? The following Ripple price analysis for 2021 will look at the token’s future potential, consider the factors affecting the value of XRP and check out what some key industry figures have to say.
Ripple - An Overview
As part of our Ripple price analysis 2021, it is necessary to take a closer look at what Ripple is and what features make it stand out from the myriad of other cryptocurrencies on the market.
Of course, it is inevitable that all altcoins will be compared in some way or another to Bitcoin. However, aside from the fact that both tokens can act as a digital currency, Ripple is a very different beast from Bitcoin. Not only does the network operate differently, but the reason behind Ripple’s inception also differs from that of its predecessor.
Ripple, as we have mentioned, is actually the name of the company behind the RippleNet payment platform. Whereas Bitcoin was set up as a peer-to-peer payment network, Ripple’s objective was to offer a seamless, lightning-fast transactional platform for banks and financial institutions. RippleNet can therefore be seen as a payment settlement, asset exchange, and remittance system that operates in a similar way to the existing standard in international money transfers: SWIFT.
XRP is the name of the token used on the Ripple network and is intended to act as a common currency when transferring funds between different fiat currencies. Most existing settlement systems rely on the US dollar as the base currency, but this incurs exchange fees and can take several days to process. By using XRP instead of USD, exchange fees are reduced to a minimum and inter-currency transfers can be made in seconds. Naturally, this has drawn interest from several banks and financial institutions, including Fidor Bank, Santander, the Commonwealth Bank of Australia and several prominent Japanese banks.
Ripple also differs from Bitcoin in how transactions are validated. Whereas the latter utilises the proof of work concept, wherein a network of nodes solve blockchain equations and are rewarded with BTC, the Ripple network uses a unique distributed consensus mechanism, which means servers or nodes on the network decide by consensus the validity and authenticity of the transaction.
The different way in which Ripple operates also means the token release mechanism differs from that of Bitcoin. Whereas BTC tokens are added as a reward for miners operating the blockchain, Ripple’s XRP is released via smart contracts. Effectively, there are 100 billion XRP tokens in existence, a large portion of which are held in escrow by Ripple. The firm then releases a maximum of 1 billion tokens every month to support transactions in the ecosystem, with any unused tokens being placed back into escrow.
On paper, Ripple certainly looks like a worthwhile investment - especially given the fact that several prominent financial institutions have expressed support for the technology. However, as we shall see, there are other factors to consider when deciding whether or not to add XRP to your portfolio. As such, the following Ripple price analysis for 2021 aims to take a closer look at these factors and their potential to affect future price movements.
History of Ripple Price Movement
A good foundation for any Ripple price analysis for 2021 is a retrospective of price movements over previous years. This will often throw up clues as to how particular factors may affect XRP’s value moving forward.
The historical trajectory of XRP’s value looks very different from those of other prominent cryptocurrencies. Most tokens start life with very little value, but cryptos like Bitcoin and Ether quickly began to rise steadily after a year or two. Ripple, on the other hand, remained almost flatlined until 2017 - almost five years after its inception. It reached a high of $0.34 in May of that year, before going into a bear run that saw it drop to $0.16 in July.
However, by the end of 2017 XRP had rallied and reached parity with the US dollar in December, following news that several financial institutions had signed up to RippleNet. Prices continued to soar until finally reaching an all-time high of $3.08 in January 2018.
The record-breaking price surge was short-lived, however, and XRP’s value had plummeted to $0.66 by 4 February 2018. The downward trend continued throughout the year and XRP finished 2018 trading at $0.37. Things remained pretty uneventful for Ripple throughout 2019, with prices generally hovering around $0.30, before dropping to below $0.20 before the year was out.
Ripple in 2020
Despite COVID-19 being something of an anomaly for the financial markets in general, the performance of XRP throughout the last twelve months is an important consideration for our Ripple price analysis for 2021.
Following a somewhat lacklustre 2019, XRP started the year trading at around $0.17. However, investors began warming to the ‘bankers’ cryptocurrency’ and prices started to creep up, reaching $0.30 before the pandemic hit and sent prices spiralling once again. The value of the Ripple token then dropped as low as $0.12 before things improved slightly over the summer. XRP showed some resilience throughout the next few months, before rallying in November to its highest price in over a year, at $0.61. Things were still looking promising for XRP in December until a lawsuit against Ripple Labs sent the token’s value crashing by over 50% in a matter of days.
Would You Consider Investing In Ripple XRP?
One of the key factors for any Ripple price analysis for 2021 will be the fallout from a court decision on 22 December 2020. Ripple was charged with conducting investments without proper licences by the US Securities and Exchange Commission, which ruled that the XRP token was a tradable security and therefore subject to the relevant regulations. Ripple Labs attempted to argue that XRP is a currency and does not have to be registered as an investment contract, but to no avail. The value of XRP dropped by more than 30% immediately following the ruling and is yet to show any sign of recovery, hovering around $0.27 at the time of writing. Further to the SEC ruling, Ripple's chief executive Brad Garlinghouse, and former chief executive Chris Larsen, were also charged with violating the Securities Act.
One of the Ripple’s lawyers spoke out against the decision, which could have wider implications for the cryptocurrency market: "The SEC is completely wrong on the facts and the law and we are confident we will ultimately prevail before a neutral fact-finder," he said. However, as it stands, Ripple is looking at being delisted from currency exchanges unless they are also registered as security exchanges. Following the ruling, Mr Garlinghouse was keen to point out that XRP the cryptocurrency was separate from Ripple, but this seems to have been largely overlooked in some corners.
Naturally, this ruling could have serious repercussions for XRP’s price movement in 2021, especially if international exchanges start to delist the cryptocurrency. It is, therefore, an ongoing factor in any Ripple price analysis for 2021 and any investors considering adding XRP to their portfolios are advised to keep a close eye on proceedings.
Experts predictions for Ripple in 2021
One way to diversify a Ripple price analysis for 2021 is by gathering independent opinions on what the future may hold for XRP. With this in mind, what follows are the recent predictions and opinions of some prominent voices from within the crypt sphere.
Popular analyst Crypto Bull has dismissed XRP’s recent legal trouble and been one of the few industry voices to commit to a Ripple price analysis for 2021, insisting that the Ripple price will recover to anywhere between $10 to $20 by as early as January 2021, and even breaking $100 later in the year. Explaining the reasons behind this optimism, Crypto Bull cited XRP charts and previous fractals; Social, economic and monetary circumstances; and unprecedented exposure of and demand for fixed assets. He described buying XRP at the price immediately following the recent legal action as an “opportunity” for savvy investors.
Another industry analyst, known by the pseudonym Crypto ISO, has suggested that whilst the SEC ruling could be a catastrophe for Ripple, its plummeting value could be about to level out. “XRP probably goes up. Is it prudent to short something after such a big drop with the news already out?” he said. “Not sure what the bull case is really and wouldn’t touch it but also wouldn’t try and milk much more on a short.”
In reference to the SEC ruling and what it means for Ripple, the prominent trader and industry commentator known as Credible Crypto has pointed out that much of the interest in XRP comes from outside the USA. “90% of Ripple’s customers are not in the US. 90-plus percent of XRP trading volume occurs on exchanges outside the US. XRP is NOT a security in Singapore, the UK, Switzerland, and Japan. If you think the SEC case is sending XRP to $0, you may not be thinking objectively. XRP is global,” he said, effectively suggesting that there is much hope for XRP in the coming months and highlighting a key consideration for any Ripple price analysis for 2021.
Many experts, however, are extremely cautious about XRP’s future and Coindust CEO and cryptocurrency analyst Neko Z has pointed out that, whilst much of XRP’s customer base does indeed lie outside the US, the management of XRP “are US citizens and so is the corporation”. She added that “If the SEC deems it a security, exchanges that interact with US clients will have to delist. I wouldn’t say it’s a 0 but it’s still a big issue.”
One industry expert that hasn’t pulled any punches is economist Frances Coppola, who frequently writes for Forbes and the Financial Times. "I think it is the beginning of the end," she said "Investors are already dumping XRP as quickly as they can." However, given that Ms Coppola has always been somewhat critical of Ripple, so her comments could be seen as slightly prejudiced in this respect.
Factors affecting Ripple price:
As we have discussed, Ripple faced some pretty substantial legal woes towards the end of 2020, the full consequences of which may yet to be realised. The SEC ruling means that XRP is classed as a tradable security, rather than a currency, which in turn means that, unlike most other cryptocurrencies, it cannot be traded on exchanges that are not specifically registered as security exchanges in the US.
Whilst this may sound disastrous, investors shouldn’t be too quick to write off XRP - the token is extremely popular outside of the US and the Ripple payment network still serves its purpose for large financial institutions. Whilst we can expect XRP’s price to remain subdued for a while yet, its low price gives it plenty of room to grow.
The prices of all cryptocurrencies are in some way or another pegged to Bitcoin. The original cryptocurrency is seen as a yardstick for measuring crypto market sentiment in general and it’s de facto role as a reserve currency means that anything that significantly impacts upon the value of BTC will have a knock-on effect for the rest of the market. As a separate issue, Investors will also want to keep an eye on how Bitcoin may be affected by the recent SEC ruling, as rumours are already circulating as to whether other cryptocurrencies could suffer the same fate as XRP.
Regulations related to cryptocurrency
We have already seen how regulatory changes can have a huge impact on the price of a cryptocurrency. It is therefore an important factor for any Ripple price analysis for 2021 - especially in the wake of the SEC ruling. For instance, if other jurisdictions outside the US follow suit and reclassify XRP, it could have disastrous consequences. However, favourable regulatory changes could have the opposite effect. Crypto investors, regardless of whether they choose to invest in Ripple in 2021, will want to keep a close eye on any changes - particularly those in the pipeline for the EU.
Supply and demand is everything for investors. Ripple has a different set-up when compared to other cryptocurrencies, in that Ripple (the company) holds vast quantities of XRP in escrow, releasing a certain amount monthly before withdrawing any leftover. At the time of writing, there are said to be over 40 billion XRP tokens in circulation, with an unknown yet potentially substantial portion "illiquid or subject to significant selling restrictions", according to Messari. Inevitably, buyer demand has tapered off following the SEC ruling, but as we have seen, many industry experts are expecting investors to warm to XRP once again in the near future.
Ready To Invest In Ripple XRP?
Ripple price analysis for 2021
Making a Ripple price analysis for 2021 is a tricky business, given the regulatory action at the end of 2020. Whilst crypto analysts often rely on technical analysis to gain insights into how a token’s price might move in the future, a substantial legal ruling such as that experienced by Ripple is an unprecedented occurrence that is understandably difficult to factor in when looking for patterns in the highs and lows of XRP’s chart movement.
As a result of the ruling, most major platforms’ price predictions for XRP in 2021 were out of date at the time of writing, as the crypto industry collectively holds its breath to see what the immediate future holds for Ripple.
Should you invest in Ripple in 2021?
There are effectively two schools of thought when considering whether to invest in XRP in 2021. Up until 22 December, the latter half of 2020 was looking promising for Ripple and much of that potential still remains, in terms of the future of the network. Some industry experts believe the downturn is little more than a short-term reaction and the low price of XRP makes it a great investment opportunity with minimal outlay.
However, as our Ripple price analysis for 2021 has highlighted, the SEC ruling could have serious implications for XRP and many prominent investors are more in favour of holding off until Ripple’s future is a little clearer. It would certainly be foolhardy to expect any astronomical growth from XRP over the next 12 months - which some argued was the case even before the regulatory action - and most investors are only likely to approach XRP as part of a diversified crypto portfolio.
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Ripple price analysis - Conclusion
Ripple was all set for record price growth towards the end of 2020, having weathered the COVID storm admirably. However, the SEC ruling that XRP is classed as tradable security can only be seen as something of a disaster for Ripple - even by the most ardent supporters of the firm and its technology. Of course, it is beyond the scope of any Ripple price analysis for 2021 to attempt to predict how this could affect the price of XRP over the long term, but any investors interested in the altcoin should approach it with caution.
We aren’t likely to see XRP’s price recover for several months and even then, much depends on any further developments with the regulatory sanctions and how exchanges around the world react. That being said, Ripple and XRP still have plenty of genuine potential and the token’s price has always been on a different trajectory to most other cryptocurrencies.
It’s fair to say that our Ripple price analysis for 2021 is apprehensive, to say the least. Anyone interested in adding XRP to their portfolio should understand that they will need to constantly monitor which exchanges are removing the token from their listings, as well as any other potential changes with regards to regulation.
Ripple price analysis 2021 - FAQ
Will Ripple go up in 2021?
It’s safe to say there are mixed views when it comes to XRP’s potential over the next 12 months. However, despite recent legal woes, our Ripple price analysis for 2021 found that many industry experts still have faith in the altcoin’s potential and given the substantial drop in value XRP suffered at the end of 2020, there is every chance the token may experience growth in 2021.
How will the SEC ruling affect Ripple’s value?
The SEC’s decision to class XRP as a security rather than a currency saw the token’s value plummet overnight. Following the ruling, several prominent, US-based exchanges delisted XRP and it is predicted that some international platforms will follow suit. Any Ripple price analysis for 2021 worth reading is unlikely to state with any certainty how the ruling will affect XRP’s value in the long term, but it’s safe to say that the price is likely to stay subdued for several months.
What are the experts predicting for Ripple in 2021?
There are many industry experts and crypto analysts who are ready to write XRP off after the regulatory action, but as our Ripple price analysis for 2021 found, there are plenty of voices expressing optimism for the ‘banker’s cryptocurrency’. Crypto Bull, for example, believes the price of XRP may breach $10 over the coming year.
Is Ripple worth investing in?
The SEC ruling of 22 December 2020 was certainly not welcome news for Ripple, but there is still plenty of life left in XRP. RippleNet is still favoured by major financial institutions around the world and, given that much of Ripple’s client base is outside the US, it is possible that XRP may just weather the storm. As such, it should always be in the frame as an option for investors looking to diversify their crypto portfolios.
Is now a good time to invest in Ripple?
Whilst our Ripple price analysis for 2021 may not have painted the most optimistic picture of XRP’s immediate future, it should also be noted that the token has ended 2020 at a low it has not seen for quite some time. As such, it might be a good time for investors to add XRP to their portfolios as, despite it being higher risk than other tokens at the current time, tokens can be acquired with minimal outlay.