Cryptocurrency investors, especially bitcoin investors, look for other cryptocurrencies to earn some more profit. XRP is one of the names that many cryptocurrency investors show interest in. Users also refer to XRP as Ripple sometimes.
Ripple has a market cap of $47.2 billion and ranks eighth in the ranking order. However, due to the high reward possibilities, many cryptocurrency investors consider investing in Ripple or XRP.
Is Ripple XRP a safe investment option, though? Many investors wonder whether they should invest in Ripple XRP or not. In this article, let me clarify if Ripple XRP is a good investment choice or not.
What Is Ripple?
Ripple is both a cryptocurrency and a digital transaction network. Chris Larsen and Jed McCaleb co-founded Ripple in 2012, the primary process of which is to serve as a payment settlement asset exchange.
It is similar to the SWIFT system that offers international money transfer and security, which banks and financial middlemen use while dealing across currencies.
Important Facets
- Ripple is a digital payment network based on blockchain and has its cryptocurrency coin, XRP.
- Instead of using blockchain mining, Ripple uses consensus mechanisms to confirm transactions via a group of bank-owned servers.
- Ripple transactions are faster, less energy-consuming, and charge very nominal fees.
- As of the end of October 2021, Ripple ranks 8th by its market cap.
What Is XRP?
The name of the cryptocurrency token of Ripple is XRP. Ripple is the name of the company. Purchasing XRP serves you as an intermediate exchange mechanism between two networks.
Advantages Of Ripple XRP
Ripple XRP provides transaction solutions to more than 55 countries, and hundreds of financial institutions are using them.
The benefits of XRP transaction are-
- Very low transaction cost 0.001 XRP. That is just a fraction of a penny as per the currency rate of transaction.
- The average transaction speed of XRP is only 5 seconds. It is speedy.
- It facilitates trades of one currency for another one.
- It has some big names as its customers, namely, Bank Of America, American Express.
- The energy consumption is meager.
- XRP can utilize PayPal, credit cards, and money orders vary significantly and are very hard to compete against when it comes to transaction methods.
Disadvantages Of Ripple XRP
XRP has its share of disadvantages. Cryptocurrencies require capital inflows consistently for price appreciation. The reason behind this is their fixed supply; for Ripple XRP, it is $100 billion. In its inability to facilitate large institutional capital flow, Ripple XRP falls behind.
- Society for Worldwide Interbank Financial Telecommunication (SWIFT) is now giving XRP tough competition.
- Compared to XRP, SWIFT has users from thousands of financial institutions from more than 200 countries worldwide.
SEC Lawsuit Against XRP
The SEC lawsuit against XRP has become a disadvantage for XRP, and it has drawn much negative attention towards XRP. SEC accused Ripple of selling $1.3 billion in unregistered securities via the XRP cryptocurrency.
Ripple had denied the accusation implying XRP is not a security, and SEC had not given proper notice that selling XRP would mean offering security. This situation has become an obstacle in Ripple’s path.
- The situation keeps Ripple from going public.
- Many major cryptocurrency exchanges have stopped selling Ripples.
- The SEC lawsuit also has worked against the rise of the price of Ripple. After the incident, the value of Ripple has only remained down. The all-time high value of Ripple is $3.84, and it has not touched that value after the lawsuit.
Should You Invest In Ripple XRP?
Now that you know what Ripple is and the advantages and disadvantages of using the Ripple cryptocurrency token XRP, the question arises: Should you or should you not invest in Ripple’s XRP?
There is a mixed answer for this question. The SEC lawsuit impacts the legitimacy and potential growth of the value of XRP if you believe that XRP is likely to get a favorable outcome.
Cryptocurrencies are already risky investment options. But the risk factor is more in Ripple than the other cryptocurrencies. There are several reasons to back Rippler up as a great investment option, but before investing, you should note the points below.
- If the SEC lawsuit has adverse outcomes that work against Ripple’s favor, Ripple investors may go bankrupt.
- Ripple has a tough competitor, SWIFT, that is already occupying the banking industry.
- Many top cryptocurrency exchanges do not offer XRP for trade.
- Most financial institutes working with Ripple do not use XRP.
If you believe that the SEC will prove Ripple innocent and that the potential of the value of Ripple is excellent, then you can surely invest in Ripple.
Conclusion
The crypto arbitrage experts are prone to invest in different cryptocurrencies. Bitcoin, Ethereum, Cardano, Ripple are always on their lists. As I said earlier, Ripple XRP investment has its merits, but the recent incidents indicate otherwise.
Was this article able to answer your queries? Do share your opinions.
Author bio:
Ani Johnson is a passionate blogger. She loves to share her thoughts, ideas, and experiences with the world through blogging. Ani Johnson is associated with Gossipment, TheParentsmagazine, ThePetsMagazine, TheDatingDiary, TheLegalGuides, EssayWritingGuides, TheSportsMag.
