2057 Why Ripple Will Continue to Be a Relatively Safe Investment in Cryptocurrency Ripple (XRP)– In the midst of a downturn in cryptomarkets to start the new year, Ripple has managed to avoid the erratic price drops that have plagued most of the market. While Ripple has experienced a steady erosion in price from the all-time high of 3.80 USD, it has been buoyed by news lingering on the horizon. Coinsquare, a popular Canadian based exchange, has already committed to XRP listing. The MoneyGram announcement, while significant enough to raise the price back to the 2.
00 USD range, is likely just the first of several companies to adopt XRP. And of course, the possibility of a Coinbase addition in the near future will keep investors wary of missing out on substantial gains. Here are a few reasons why XRP pricing will continue to hold steady over the coming months: Real-World Usability MoneyGram.
Arrington XRP Capital. Cuallix.
American Express. Western Union or another big name coming soon to that list. The price of XRP is being propped up by the prospect of being a pervasive feature in the world of fintech. Imagine if Ripple, with XRP held as liquidity, became the prominent technology for money transfers by the year 2020. Who wants to sell a coin now at $2 that could easily be worth $10 a year from now? XRP’s price is still undervalued for investors who plan to go long or enthusiasts who believe in Ripple as the future of money transfer. Thus far, few other currencies have managed the same level of adoption and exposure as XRP.
Even Bitcoin has succumbed to a failure to gain momentum in a usable way. The price of BTC has stagnated primarily for two reasons: uncertainty in the marketplace and a lack of usability. The first was created by the sudden rise of Bitcoin Cash and the extensive marketing campaign of Roger Ver and other supporters. Bitcoin Cash, a hard fork of BTC created in August 2017 to improve the feasibility of BTC scaling, has created enough uncertainty in the marketplace to make traders and the general public wary. Crypto is confusing enough. Imagine being a newcomer, having heard all about the wonderful things of Bitcoin from co-workers and friends, and seeing Bitcoin and Bitcoin Cash. Which do you buy? Why is one priced roughly 5x the value of the other? Then you find out all those who were holding Bitcoin at some point received an equal amount of BCash. Now, not only does BTC begin to lose the appeal of scarcity or lack of inflation, it starts to feel more like a ponzi scheme.
Not only do early adopters benefit from the rapid appreciation of Bitcoin over the past year, but they also have a stake in Bitcoin Cash. Couple that with Roger Ver appearing on mainstream media declaring that BCash is Bitcoin and that Bitcoin Core is dead and you effectively have a market that is paralyzed with uncertainty. The second major factor in the stalling of Bitcoin’s price is the lack of usability. The only value of a currency is what people ascribe to it. Bitcoin’s price has been predicated upon the speculation of use as a long-term storage of value. The process for BTC to be used as a currency exists. Anyone can send and receive BTC and participate in blockchain transactions. But the ability for widespread market adoption is just not there, yet .
Unless you hold a massive amount of BTC, high transaction fees will continue to cripple the market. Most people are holding Bitcoin with the hope that it will be exponentially more valuable in the future. If the average person would struggle to afford even a fraction of a single Bitcoin, then what incentive do they have to spend it now, when prices are theoretically well below their target price, and pay an exorbitant fee? Bitcoin has the opportunity to address scaling issues and reclaim its position as a dominant “currency,” but until then it largely falls into the category of an asset, like gold, that is best for storing wealth. Now that Bitcoin is becoming more mainstream, the conversation dominating the public mind is not “What is Bitcoin?”, but “How do I use it?” That’s no longer a question BTC enthusiasts can easily answer.
Sure, you can send and receive BTC like any other currency, but only with the caveat of high fees and slow transaction times. This alone is creating a more toxic atmosphere for the future of Bitcoin than any claim of ponzi scheme of the uncertainty of BCash. In the end, Bitcoin will figure out its scaling issues and return to a state of usable digital currency. However, in the meantime, a door has been opened for altcoins to eat away at the dominance of BTC market share with the promise and demonstration of real-world usability.
Separation from Bitcoin and Lack of Competition Most cryptocurrency news revolves around comparison to Bitcoin. For good reason. Bitcoin was the earliest cryptocurrency in its modern conception, and holds the bulk of the market share by a wide margin. However, one of the true benefits of Ripple is how it is able to establish an identity apart from Bitcoin.
Many of the top 10 coins like BCash and Litecoin are forks of Bitcoin that exist in direct competition to the parent currency. While Charlie Lee, creator of Litecoin, has long positioned LTC as the “silver” to Bitcoin’s gold, even that competitive relationship will come to a head if cryptocurrencies are to become the dominant form of payment. XRP is something different. The Ripple technology was built as a way to improve the transaction speed and fees associated with large bank-to-bank transfers.
While XRP does offer open-source usability and blockchain security, its function as a currency is fundamentally different from BTC.
That being said, Ripple does have the potential to challenge Bitcoin as a dominant currency in person-to-person or person-to-business transactions. A digital currency needs to be fast and cheap to transact. Cryptocurrencies have the added benefit of security and anonymity through a consensus ledger (blockchain). Because of the focus on bank transactions, Ripple has been seeking to build upon the scaling issues of Bitcoin since day one. We still don’t know how Litecoin and BCash would scale if given the same load of transactions that BTC is currently bogged down with. The same could be said for Ripple, but at present, the technology of XRP offers some of the cheapest and fastest transactions of all crypto. We could see internet commerce sites and small business begin adopting Ripple as a way to engage cryptocurrency buyers, just as what occurred with Bitcoin in the past prior to the high fees.
Either way, it’s possible for a trader and crypto-enthusiast to build positions in both Bitcoin and Ripple (or other BTC derivatives) without worrying that the two will produce a zero sum game. In the long-run, that may not be the case. The coming year will reveal a lot about the direction of the cryptomarketplace and whether Bitcoin will retain its dominance. Lightning Network or some similar improvement may finally provide the solution to Bitcoin’s congested network and return it to a usable form of digital currency.
For now, XRP exists in a sphere with few other direct competitors (mainly XLM). You can believe in the revolutionary effects of Bitcoin while still supporting Ripple as a value proposition. Greater Adoption Through Exchanges & XRP Pairing It’s hard to talk about the price of XRP over the last several weeks without addressing the elephant in the room: .
