Ripple (XRP): 6 Things to Know Before Considering Investing in XRP Cryptocurrency

If you are considering buying XRP, here is what you need to know about it.

XRP is currently one of the top 10 cryptocurrencies. If the name means nothing to you, you may be more familiar with its developer, Ripple. Although the cryptocurrency is called XRP, some people use “XRP” and “Ripple” interchangeably.

With a solid use case and leading financial partnerships, there is plenty of room for XRP to grow. But there are obstacles that can hold him back. Before making the next investment in crypto-currencies, there are a few things you should know about it.

1. This is a cryptocurrency designed for financial institutions.

When investing in cryptocurrency, one of the most important things to pay attention to is the purpose of the coin. See also: Investing in Ripple: is it worth buying XRP at the current price?. Many of them fail in this area because they don’t have a specific goal or they do something different than dozens of other things.

XRP is unique in that it targets financial institutions and payment services, unlike other consumer-facing cryptocurrencies. Using XRP, banks and more societyYou can transfer money without the need to first fund accounts in other countries or pay high exchange fees.

2. Its goal is to improve international money transfers

Ripple is positioning itself as a competitor to SWIFT, the system that most financial institutions use for international money transfers. See also: When is the best time to buy cryptocurrency and invest in it?. It offers a global payment network called RippleNet to facilitate cross-border transactions.

Financial institutions using RippleNet can use XRP for their money transfers. However, most Ripple partners avoid using XRP due to its volatility.

3. Transactions are fast and cheap

The two biggest advantages of XRP are speed and low cost per transaction. A standard transaction in Ripple costs 0.00001 XRP. See article: Bitcoin Cash: Leads as Major Cryptocurrencies Fall. This is a fraction of a penny compared to the current price of XRP, which is less than $1.

The average transaction duration is five seconds. Overall, XRP is a very efficient way to transfer money.

4. Has partnerships with more than 300 financial companies.

Hundreds of financial companies in over 40 countries have signed up to use Ripple. Here are some examples:

  • American Express
  • Bank of America
  • Banco Santander
  • TransferGo
  • xendpay

However, it still has a long way to go to catch up with its main competitor. In comparison, SWIFT has over 11,000 partners compared to over 300 for Ripple. But SWIFT has also been around since the 1970s, and Ripple was launched in 2012, so its results so far are encouraging.

5. The SEC filed a lawsuit against Ripple.

Ripple has been embroiled in a lawsuit with the SEC. The lawsuit, filed in December 2020, accuses Ripple of selling $1.3 billion worth of unregistered securities.

We are talking about an unregistered security – the XRP cryptocurrency. Ripple defended itself by stating that XRP is not a security.

This lawsuit is ongoing. While this is a reason to be wary of XRP, it could 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 into stock Exchange through an IPO when the deal closes, which could also potentially boost the price of XRP.

6. It is trading well below its 2018 all-time high.

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 hit $3.84.

XRP has somewhat followed the ups and downs of the rest of the cryptocurrency market and its price hit $1.96 in April of this year. It has since dropped to around $0.84 at the time of writing. The weaker returns of XRP compared to other coins are likely a consequence of the SEC lawsuit.