If you are thinking of buying XRP, here is the information you need to know about it.
XRP is currently one of the top 10 digital currencies. If the name doesn’t ring a bell, you may be more familiar with its developer, Ripple. Although the cryptocurrency is called XRP, some people use “XRP” and “Ripple” interchangeably.
With a strong use case and high-profile financial partnerships, XRP has plenty of room for growth. But there are also some obstacles that may hinder it. Before you make it your next investment in cryptocurrency, there are several things you should know about it.
1. It is a cryptocurrency designed for financial institutions
When investing in cryptocurrencies, one of the most important things to look at is the purpose of the coin. Many fail in this area, as they do not have a specific purpose or do nothing different than dozens of other coins.
XRP is unique in that it is intended for financial institutions and payment services, unlike other cryptocurrencies aimed at consumers. When using XRP, banks and other financial companies can transfer funds without having to fund pre-existing accounts in other countries or pay huge foreign exchange fees.
2. Its goal is to improve international remittances
Ripple has positioned itself as a competitor to SWIFT, the system used by most financial institutions for international money transfers. It provides a global payments network called RippleNet to facilitate cross-border transactions.
Financial institutions that use RippleNet have the option of using XRP to transfer funds. However, most of Ripple’s partners avoid using XRP because it is volatile.
3. Fast and cheap transactions
The two biggest advantages of XRP are speed and low cost per transaction. The standard transaction cost on Ripple is 0.00001 XRP. That’s a fraction of a penny at the current XRP price of just under $1.
The average transaction time is five seconds. In general, XRP is a very effective method of money transfer.
4. It has partnerships with more than 300 financial companies
Hundreds of financial firms in more than 40 countries have signed up to use Ripple. Here are some examples:
- American Express
- American bank
- Santander Bank
- the transfer
However, she still has a long way to go to capture her biggest competitor. To put things into perspective, SWIFT has more than 11,000 partners compared to Ripple with over 300. But SWIFT has also been around since the 1970s. Ripple was launched in 2012, so its results so far are encouraging.
5. The Securities and Exchange Commission sued Ripple
Ripple found itself embroiled in a lawsuit with the SEC. The lawsuit, filed in December 2020, accuses Ripple of selling $1.3 billion in unregistered securities.
The unregistered security in question is the XRP cryptocurrency. Ripple has defended itself by saying that XRP is not a security.
This case in court is still ongoing. While it is a reason to be cautious about XRP, it can also be a reason to invest if you think the case will go the way of Ripple. Ripple’s positive result could lead to an increase in the price of XRP. In addition, Ripple plans to go public when the issue is over, which could also drive up the price of XRP.
6. It is trading well below its all-time high of 2018
Quite a few cryptocurrencies have broken their previous highs in 2021, but XRP is an exception. Its highest point was in January 2018, when it briefly reached $3.84.
XRP followed the rest of the ups and downs in the cryptocurrency market to some extent, reaching $1.96 in April of this year. It has since fallen to around $0.84 at the time of writing. XRP’s small gains compared to other currencies are likely to be the result of the SEC lawsuit.
7. There are not many places to buy XRP in the US
It is not easy for US residents to buy XRP now. Another consequence of the SEC lawsuit against Ripple is that several major cryptocurrency exchanges have delisted XRP. Fortunately, there are still a few places you can buy it, including:
XRP is an interesting (albeit risky) crypto investment opportunity. Now that you know more about it, you are ready to make an informed decision as to whether it is worth buying.
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