If you are planning to buy XRP, here’s what you need to know about it.
XRP is now one of the 10 largest cryptocurrencies. If the name means nothing to you, you may be more familiar with its developer, Ripple. Although cryptocurrency is called XRP, some people use “XRP” and “Ripple” as interchangeable.
With a powerful use and leading financial partnerships, XRP has many opportunities for development. But there are obstacles that can hold him back. Before you make your next investment in cryptocurrency-Currencies, there are a few things you need to know about this.
1. This is a cryptocurrency intended for financial institutions.
When investing in cryptocurrency, one of the most important things to pay attention to is the purpose of the coin. See the article: 3 cryptocurrencies are likely to capture future profits under control: Ethereum (ETH), Solana (SOL) and Mithril Finance (BARS).. Many of them do not succeed in this area because they do not have a specific goal or do something different from dozens of other works.
XRP is unique in that it targets financial institutions and payment services, unlike other consumer-oriented cryptocurrencies. Use of XRP, banks and others societys can transfer money without the need to replenish accounts in other countries or pay expensive exchange fees.
2. Its purpose is to improve international remittances
Ripple positions itself as a competitor to SWIFT, a system that most financial institutions use for international money transfers. Read also: Don’t miss the 10-fold return from Cardano (ADA), Vechain (VET) and Mushe (XMU). It offers a global payment network called RippleNet to facilitate cross-border transactions.
Financial institutions that use RippleNet have the ability to use XRP for their money transfers. However, most Ripple partners avoid using XRP because of its instability.
3. Transactions are fast and cheap
The two biggest advantages of XRP are the speed and low cost of each transaction. A standard transaction on Ripple costs 0.00001 XRP. This may interest you: Are institutional investors dumping bitcoin amid the collapse of the cryptocurrency market?. This is a small fraction of a penny to the current XRP price, which is less than $ 1.
The average duration of the transaction is five seconds. In general, XRP is a very effective way to transfer money.
4. It has partnerships with over 300 financial companies
Hundreds of financial companies in more than 40 countries have signed up to use Ripple. Here are some examples:
- American Express
- Bank of America
- Banco Santander
However, it still has a long way to go to catch up with its main competitor. To address the situation, SWIFT has more than 11,000 partners, while Ripple has more than 300. But SWIFT has also existed since the 1970s. Ripple was launched in 2012, so its results are still encouraging.
5. The SEC filed a lawsuit against Ripple.
Ripple was involved 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 cryptocurrency XRP. Ripple defended himself by saying that XRP is not a security.
This lawsuit is ongoing. While this is a reason to be wary of XRP, it can also be a reason to invest if you think the deal will go the way of Ripple. A favorable outcome for Ripple could lead to an increase in the price of XRP. In addition, Ripple plans to enter Stock Exchange through an IPO after the deal closes, which could also potentially raise the price of XRP.
6. It is trading well below its historical high since 2018.
Many cryptocurrencies reached their previous highs in 2021, but XRP is an exception. Its peak was in January 2018, when it briefly reached a price of $ 3.84.
XRP has to some extent followed the ups and downs of the rest of the cryptocurrency market, and its price reached $ 1.96 in April this year. Since then, it has dropped to about $ 0.84 at the time of writing. XRP’s lower profits than other coins are likely the result of an SEC lawsuit.