Ripple is considered one of the most famous and important digital currencies not only due to the huge volume of liquidity, but also because Ripple Labs has a special vision about the future of the Ripple currency and a distinctive work program, as the Ripple protocol has been adopted by famous financial institutions, thanks to the low operating costs and the speed of processing Transactions.
There is no denying that cryptocurrency trading is becoming more and more popular, but it is very important that you know what you are investing in. As for XRP, it has cemented its stunning position to join the five largest cryptocurrencies in the world. Ripple is expected to grow larger and larger this year.
Trading in Ripple instead of buying it naturally gives way to taking advantage of price fluctuations and opportunities in the markets. Many brokerage firms now offer their traders the opportunity to buy and trade in Ripple. However, there are a few things you should know before investing and trading Ripple.
Who should trade XRP or include their portfolios?
There are many wallets dedicated to depositing the digital assets of the Ripple currency in the event that the investor wishes to buy and hold the currency. There are also trading companies that allow investors to speculate and trade on their prices without having to actually buy them. These are the ones who should trade on XRP or include their portfolios:
1. Cryptocurrency aficionados: XRP is part of the crypto boom that has swept the market in recent years, and may be considered a good addition to a balanced wallet based on digital currencies.
2. Subject Investors in the Financial Sector: While XRP is used by major financial institutions, it may be part of a portfolio based on that sector.
3. Bitcoin and Ethereum traders: There are some factors affecting Ripple Labs’ XRP, which differ from those affecting other currencies. Thus, it can be used as a hedge tool while investing in other currencies.
4. Day Traders: XRP is exposed to sharp fluctuations, and therefore, it offers many trading opportunities in the short term, whether through buying or selling deals.
What drives the XRP price?
1. General market trends: Many digital currencies tend to move in tandem, and XRP is no exception. XRP rates are often linked to the other major currencies, such as Bitcoin.
2. General Accreditation: The Ripple Labs platform meets the needs of many financial institutions and other companies in the financial sector. Therefore, when it is approved by a large, well-known institution, this may increase its value.
3. Technological progress guarantees the future of the Ripple currency: Ripple Labs is still a startup (despite the fact that the (XRP) market value has made it the fifth largest startup in the world), and therefore, it may introduce many innovations and may come to the fore. While Ripple Labs holds 61% of all XRP tokens, major changes within the company could have a massive impact on the currency.
XRP: Transactional Breakthrough
XRP was created to conduct secure, real-time multi-currency transactions, based on a blockchain protocol similar to that of Bitcoin. However, unlike Bitcoin, Ripple Labs aims to revolutionize the digital payment industry by cutting both processing time and transaction fees.
The success of Ripple Labs cannot really be denied, with dozens of banks using its services, including international brands such as Bank of America and Santander. While the market value is in the billions, the majority of the coin is owned by Ripple Labs, which controls a lot over its value. For example, if Ripple Labs decided to increase its capital by selling XRP coins, this could lead to a major change in its price, as the markets would be flooded with new currencies. Despite this, Brad Garlinghouse, the company’s chief executive, said that in order not to surprise investors, new currencies would be introduced for circulation gradually, and with prior notice.
Therefore, it is extremely important to note that XRP is a much more feasible target than Bitcoin. While Bitcoin is primarily viewed as an investment tool today, and its buyers are primarily using it as a means of making profits, Ripple Labs’ ripple currency has always been used on its platform. Thus, in light of the increasing number of organizations adopting the platform to conduct commercial transactions, the currency price may become more stable and become less vulnerable to fluctuations.
The history of XRP
XRP has its origins in 2004, when Canadian developer Ryan Vogger created RipplePay, a decentralized cash system designed to empower local communities to create their own money. Several years later, a new system based on Fogger’s concepts arose, called OpenCoin. This contributed to an increased speed of processing transactions, as well as consuming less electricity compared to the performance of the Bitcoin blockchain.
After merging, OpenCoin changed its name to Ripple Labs and immediately began focusing on the banking sector. The Ripple Labs platform enables banks to conduct transactions quickly and securely, while keeping costs low. XRP was used on these platforms as a moderate currency while conducting transactions, and Ripple Labs continues to hold the majority of the currency units.
The market value of XRP increased gradually, until it jumped during the cryptocurrency boom in May of 2017, when it crossed the record level of $ 10 billion for the first time.
The future and strength of Ripple is its function
With the emergence of many digital currencies over the past few years, the question always arises about the longevity of these currencies. However, XRP is not in danger of vanishing, because its platform is used by many large financial institutions that benefit from their ongoing services. This is not necessarily a factor affecting the strength of XRP, but rather its stability.
Nevertheless, when we combine their stability with the increasing popularity of the major digital currencies, and bearing in mind that those currencies are always moving in one direction together, it would be better to assume that XRP will remain an attractive investment opportunity. Moreover, the fact that it is always used gives it liquidity that is rarely seen in the currency market.