Ripple Trading Predictions For 2021 Onwards
Ripple was created by Ripple Labs Inc. a tech company in the United States and then launched in 2012. They use open-source software protocols and the ledger they operate houses the native coin XRP, known as Ripple. Like many cryptocurrencies, XRP is an investment opportunity as well as a method for making transactions. There are several reasons why many are choosing to invest in Ripple in 2021 to capitalise on their unique system.
The system is payment centred and also supports transactions between fiat currencies. This means that the money of any nation can be represented by a token on Ripple’s system. Money can then be transferred between currencies without a costly middle man. Ripple deals in other crypto coins and even value items like mobile phone minutes and air miles. The transactions that are made are one way as the system does not support chargebacks.
Ripple’s ledger is distributed so that it can be shared in its common form and managed by independent servers which work together to form a secure network. This ledger retains all of the account information for Ripple users as well as recording all transactions made on their network.
This system allows Ripple to boast lightning-fast, extremely cheap and secure transactions. Ripple has stated that they are cheaper and more scalable than any other digital asset available. It is these qualities that have piqued the interest of investors, particularly following the first major surge in November 2021.
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- Is Ripple Decentralised?
- Ripple’s Low Fees
- The Ripple Timeline
- Road Bumps for Ripple
- Ripple’s Environmental Impact
- Trading XRP to USD
- Will Ripple Rebound From the Last Correction?
- Predictions for Ripple in 2021 and the Future
Is Ripple Decentralised?
The short answer is yes. The technology used by Ripple is the same type of unrestricted open-source blockchain used all over the decentralized finance (Defi) market. It is designed for these types of decentralised payments, exchanges and peer-to-peer interactions.
However, Ripple definitely holds a more centralized position than most of the Defi sector. Where many crypto-currencies are in direct opposition to the traditional centralized financial models, Ripple does not. Ripple has set itself up to replace the SWIFT money transfer system that these centralized institutions currently use. The CEO of Bitwave, Pat White states:
“Ripple was designed from the very beginning to essentially be a replacement for SWIFT (a leading money-transfer network) or to otherwise replace the settlement layer between major financial institutions.”
Pat White, CEO of Bitwave
This sets Ripple apart from the other top cryptocurrencies. The Ripple system interacts between both the newly emerging Defi market and the established central financial markets. Because of this many large financial institutions and businesses are already using Ripple systems and making the most of the functions the platform offers.
Some of those adopting Ripple into their working practices are American Express, Santander and Banco Rendimento. This shows that Ripple has already achieved far greater adoption within the central market than most cryptocurrencies. This provides a competitive edge along an avenue not explored by the more Defi centred crypto-coins. Ripple works to integrate with the existing banking networks rather than cutting them out of the picture altogether.
Ripple’s Low Fees
In most transactions, there is a fee deducted by the network which is allowing the transaction to take place. These can range from tiny amounts to the large transactions fees often involved with sending money overseas or exchanging currencies through banks.
A board member of Onchain Custodian, El Lee describes:
“The standard fee to conduct transactions on Ripple is set at 0.00001 XRP, which is minimal compared to the large fees charged by banks for conducting cross-border payments,”
El Lee, Onchain Custodian Board Member
Given that the price of XRP, at the time of writing, is $0.89 this would place the estimated transaction fee at $0.0000089. This is low enough to be considered negligible and makes Ripple a far better option for payments and exchanges than most of the leading global services. It also out-competes most other cryptocurrencies for low transaction cost.
The Ripple Timeline
2004 - Ryan Fugger first formed the idea for Ripple.
2011 - Jed McCaleb started to develop his digital currency, using a consensus-based protocol for verification instead of the mining method used by Bitcoin.
2012 - Jed McCaleb employed Chris Larsen before taking his research to Ryan Fugger. Ripple was launched as Opencoin.
2013 - Opencoin was renamed Ripple Labs Inc.
2016 - Ripple became the fourth company to have a BitLicence after being issued a virtual currency licence by the New York State Department of Financial Services.
2017 - Ripple ranked for a short time as the second-largest cryptocurrency by market capitalization, with a market cap of $73B.
2018 - Banking apps using the Ripple blockchain were launched by 61 Japanese banks as well as the Spanish bank Santander and Axis Bank in India.
Road Bumps for Ripple
Ripple has experienced resistance from some central US institutions and had a class action filed against them. This lead to legal action being taken against them by the U.S. Securities and Exchange Commission (SEC) as they felt that Ripple was listed as a commodity when it should have been classed as a security. They also did not feel that Ripple was being adopted by financial institutions in a clearly outlined way.
Although Ripple Labs was prepared to fight the allegations in court Coinbase removed XRP from its listings in 2018. Ripple remains tradable and is supported by other cryptocurrency platforms.
The pre-mining of Ripple caused some concerns with some economists worried that it would lead to too much being realised at once. However, Ripple has established that it intends to release them periodically, in a similar pattern to traditionally mined coins. Tim Enneking, the Managing Director of Digital Capital Management comments:
“The company has tried to reduce the uncertainty by implementing several mechanisms (trust, predictable release, etc.)”
Tim Enneking, Managing Director of Digital Capital Management
It is in Ripple’s best interest to release the currency slowly as this helps to maintain the rarity of the coin and boost its value.
Ripple’s Environmental Impact
After the environmental allegations against Bitcoin caused a drop in share price, investors are keen to know the carbon footprint of their investments. However, the Ripple system runs at a much lower less energy cost.
Researchers at the Universities of Stanford and Stockholm found that a server used to run Ripple’s protocol had a similar carbon footprint to an email server. The low energy usage of their system led to Ripple Labs Inc. being listed as one of the 50 Smartest Companies of 2014 in the MIT Technology Review.
This is great news for Ripple investors who are looking to avoid environmentally unstable investments. Ripple has a far better environmental model than Bitcoin has been said to have which should avoid similar drops in token price.
Trading XRP to USD
Ripple has seen a more volatile resistance period than some of the other top ten cryptocurrencies in circulation. The sideways trading pattern has also shown a declining trajectory. However, the boom that was seen across the Defi sector at the end of 2020 and into 2021 still shows up in the XRP results.
Ripple’s first two peaks in November 2020 and February 2021 both touched just above the $0.60 mark. This brought XRP back up to the values achieved around its initial offering. This has returned the value lost during the unimpressive trading period between early 2019 and the end of 2020. April 2021 saw the XRP prices skyrocket to reach an all-time high of $1.81 by the 15th of April 2021.
There was a correction before the next peak which was more tempered, topping off at $1.64. The 19th of May 2021 saw the beginning of a bearish trading period and the price is now down to $0.65, nearly halving the highs of April 2021. This is a significant drop, however, returns are still up 287% this year to date which still provides significant profits for existing investors.
Will Ripple Rebound From the Last Correction?
The trading price at the time of writing is $0.85, which is less than investors had hoped for, after the $1.81 peak. However, the trajectory over the past year has been volatile but positive. The substantial repositioning of the XRP price is partly due to the disputes which are ongoing with the SEC. As Tim Enneking points out:
“They are positioning themselves as a settlement layer for regulated companies, but they’re also deep in a dispute with the SEC. None of the customers they would love to be onboarding can really start to use XRP until Ripple has gotten their legal woes figured out.”
Tim Enneking, Managing Director of Digital Captial Management
However, if this is resolved in Ripple’s favour, this would give Ripple the boost it needs to reverse the current dip. This being said, the trajectory has been extremely volatile in both directions for Ripple and experts are advising caution when investing during 2021.
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Predictions for Ripple in 2021 and the Future
Ripple is undergoing a volatile period. Although, for those who invest in 2021 while prices are low, there are large possible profits once the crypto-coin recovers. Ripple’s bearish trading may not be good news in the short term, but there are several aspects predicting positive returns in the future.
Because ripple is at the forefront of industry adoption, particularly with existing banks, it is making itself increasingly vital to the financial sector. By working to fulfil the needs of both the Defi market and the central banks, Ripple puts utility first and is pushing to the centre of global finance.
Ripple is already well distributed across the globe and has achieved extremely fast transactions speeds. Ripple Labs Inc. has said that it will use these extra fast speeds to rival Visa for the quantity and ease of transactions in the near future. If they achieve this aim this will be great news for their trading prices which could lead to Ripple exploding from 2022 onwards.
The current outlook for Ripple in 2021 is subdued. It is from 2022 onwards that investments made in 2021 are likely to result in profits. For those thinking longer term, 2021 might be the time to invest in XRP while stock prices are relatively low.
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Ripple Trading Forecast for 2021
The level of industry adoption that Ripple has achieved and its fast transaction verification give Ripple a good basis for future growth. The scalability of Ripple is also supported by its market cap of $85B. These factors allow Ripple to hold its own in the Defi market against larger players like Bitcoin and should keep the XRP price steady during the bearish cycles taking place currently.
However, the trading forecast for the rest of 2021 is looking a bit sluggish. Investing in XRP in 2021 is likely to be profitable in 2022 and the following few years, rather than 2021 itself. Investors looking for long term growth could profit from entering the market at a low point and waiting for the industry adoption rates to get XRP prices moving upward again.
Given the bull run seem across the crypto market it makes sense that Ripple will eventually capitalise on this growth. Ripple is well-positioned to reach its scalability goals once it moves past the current hurdles slowing down its progression. However, some long forecast price predictions feel that XRP will reach $0.90 before the end of 2021, which will begin the upward trend earlier than expected.
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What is Ripple?
Ripple is a payment system developed to complete transactions and currency exchanges between parties, using a secure blockchain network. As well as the XRP native coin Ripp;e can support other crypto-coins as well as fiat currencies and valuable commodities such as gold. The XRP native coin can be bought as an investment or used on the Ripple network to make transactions and exchange currency. XRP is also the currency that fees are charged in, although these are very low values.
Who is behind Ripple?
The ledger that Ripple uses was built by Jed McCaleb and his associates using blockchain technology. Arthur Britto and David Schwartz helped to engineer the Ripple protocol. They joined Ryan Fugger to turn his work in digital finance into a functioning payment system.
How does Ripple compare to Bitcoin?
Ripple is not mined the way Bitcoin is because the XRP tokens are pre-mined and held by Ripple Labs Inc., to be released slowly into the market. Ripple also boasts much fast processing times, completing transactions in 3-5 seconds rather than the hours it can take to with Bitcoin. El Lee supports this, stating:
“Bitcoin transaction confirmations may take many minutes or hours and are typically associated with high transaction costs...XRP transactions are confirmed around four to five seconds at much lower cost.”
El Lee, Onchain Custodian Board Member
The speeds also allow Ripple to be much more energy-efficient, with none of the large scale energy concerns which have been flagged with Bitcoin.
Should I invest in Ripple in 2021?
Ripple is a volatile cryptocurrency that is experiencing some setbacks currently. However, as it is supported by widespread adoption by the central financial market it is likely to go up. Although investors are unlikely to achieve large returns in 2021, by investing while the bear market is keeping XRP prices low, profits could be substantial when the next surge occurs. This is likely to happen once the current disputes with the SEC are resolved, allowing Ripple to achieve its scalable potential.
Is Ripple still going to go up?
Ripple has a very scalable model, with a market cap of $85B which leaves plenty of room for exceptional growth. Given that Ripple has some of the best market adoption rates of any of the top cryptocurrencies it is likely that it will continue to go up. The current issues with the SEC and the current blockchain technology are slowing its progression. When these roadblocks are dealt with XRP will be much more able to achieve the projected highs seen in other substantial crypto coins. Investing in XRP in 2021 should lead to substantial profits later on in 2022 and in the following couple of years.
What will XRP prices rise to in 2021?
XRP is set to be volatile during the current bearish period. The peaks are likely to be around the $0.90 mark which is a significant increase from the current price. Larger surges are unlikely until 2022 onwards.