Ripple (XRP) is one of the most popular digital currencies around the world, as well as one of the most fascinating.
It does not embrace decentralization in the same way as Bitcoin or Ethereum, but can also be used with other renowned cryptocurrencies. Rather, the cryptocurrency is closely associated with numerous financial companies, investment firms and organizations across the globe.
This may appear contradictory to the ethos of cryptocurrency, as many traders believe that the main selling point of digital coins is their independence from external organizations. Still, experts are increasingly suggesting that it could be the driving force behind Ripple’s success.
Overview of Ripple History and Timeline
The Ripple payment protocol is a service permitting firms to transfer money and make payments. The Protocol is compatible with both traditional currencies and digital currency, as well as with commodities. This protocol uses XRP as its native currency.
At the end of 2020, the U.S. Securities and Exchange Commission (SEC) initiated legal action against Ripple Labs and its current and former CEOs. The SEC stated that XRP should not be considered a security, meaning it is not a financial instrument that can be bought and sold, but instead a form of ownership in a company or other entity.
When news of the SEC’s complaint, filed on December 21, was made public, XRP’s market capitalization decreased by $16 billion, or 63% of its present value. As a result of the lawsuit, crypto exchanges ceased trading the coin and crypto funds liquidated their investments, leading to a massive drop in the coin’s value. It reached an all-time low of $0.48 on May 18, after having hit an all-time high of $3.40 in July 2020.
The main factor contributing to the severe volatility of the Ripple market was the continuous updates of the SEC complaint. While higher volatility usually results in higher gains, it is also a very risky investment. XRP has not seen any gains this year comparable to its all-time high in 2020, leading many to ask: does the future look bright?
Impact of the SEC Case on Ripple
In 2020, the U.S. Securities and Exchange Commission (SEC) brought a lawsuit against Ripple Labs, including its current and former CEOs. The SEC declared that XRP should not be considered a security. A security is a financial instrument that can either be bought or sold, but which has no practical purpose. It is ownership in a company, or any other entity.
When the SEC complaint was made public on December 21, XRP’s market cap fell by $16 billion, or 63% of its present value. As a result of the lawsuit, crypto exchanges stopped trading the coin and crypto funds sold off their investments. The coin’s value plummeted.
XRP’s current value of $0.48 can be attributed to the ongoing legal dispute with the SEC. News and speculation have a tremendous influence on financial market movements, and the sentiments surrounding XRP investment are largely impacted by pessimism about the future.
How much of an effect will this have? All analysts agree that the case will be resolved in the same manner, but what price can we anticipate?
Is Ripple a Wise Investment?
XRP has a few things going for it, particularly if Ripple’s initial public offering (IPO) is approved by the SEC following its legal victory. There are many financial services accessible that enable payments across multiple platforms and Blockchains.
For instance, the PayID tool accessible on the Ripple Supports platform permits users to transfer currency between platforms using an easy-to-read, secure, and compatible ID. Similarly, One Pay FX allows customers to make international payments quickly and economically with same-day delivery, enabling them to see the time of cash arrival and the fee. XRP is accepted for international transactions by numerous financial institutions, such as MoneyGram.
These are all positive signs for XRP’s future value. The events of 2021 and 2022 have made clear that the XRP/USD currency pair still has considerable speculative attributes due to ongoing legal battles and the overall bearish nature of the crypto market. On the other hand, XRP/USD continues to generate both volatility and volume. XRP has proven that it can increase its market capitalization only to lose it almost completely in a short amount of time. This is good news for traders willing to take risks.
The number of industry professionals who believe XRP will reach $10 in the near future, or at any point, is very small. If the bear market recovers and starts to climb, XRP could follow Bitcoin’s lead and begin to rise again. These industry experts all agree that Ripple’s price could rise to as high as $25 or even $10. Others think that XRP’s capabilities can propel it to the same level of industry acceptance and recognition as Bitcoin and Ethereum, the benchmark for cryptocurrency.
Ripple is gaining market share quickly due to its speed in processing transactions and the growing number of partnerships it has secured.
Final Thoughts
XRP is a great option for your first cryptocurrency investment portfolio due to its potential price appreciation. Be prepared for the price