Ripple or XRP is both a platform and alternative cryptocurrency. XRP has huge growth potential for facilitating transactions worldwide.
The Ripple Net is a network of institutional payment providers (banks and many service businesses) that offers a frictionless experience to transact using currencies, assets, or commodities.
In other words, if I have a necklace to sell and am looking for a bicycle to buy, the Ripple exchange will serve as an intermediary to help find me a buyer and a seller. Plus, once I have the transaction at hand, I can pay in any form, including in bitcoin, fiat currencies and gold. The transaction fee is nominal at only $0.0000138. Furthermore, the transaction time is FAST — a mere four seconds on average!
Another way to describe Ripple in layman’s terms is that it is like the joker in a deck of cards. No, not like the joke many are ascribing to Dogecoin [DOGE]. I mean the joker card, which in a deck of cards can replace any card you might need if one of the other 52 goes missing.
The Pros for Ripple include:
1. Borderless payments and global partnerships — They acquired a 40% stake in Tranglo, a Malaysian financial services company. Hot off the press, Cambodia just introduced the first international remittance service using blockchain with a joint venture between SCI holdings and Ripple.
2. Non-Fungible Tokens (NFT) — As for the future of e-commerce, Ripple provides compatibility for NFTs, which are used to trace and identify goods such as art, collectibles, and music.
3. Part of the international phenomenon — China, Cambodia, the Bahamas and several South American countries are using digital currencies of their own. The rise of blockchain like Bitcoin [BTC], Ethereum ETH] and Ripple are forcing countries to take their emergence more seriously.
4. Large financial institutions — Santander, Axis Bank and Yes Bank are a few examples that are already using features of this network, demonstrating it already has larger institutional market adoption than most cryptocurrencies.
The Cons for Ripple include:
1. The network is highly centralised — Contrary to the notion of decentralised finance, Ripple lends itself to bank and government control.
2. Private company that controls the supply — Ripple Labs decides when to release coins, giving it ultimate control. This means Ripple Labs has more power to influence the value of XRP by deciding when and how many tokens to release. (Note: Reportedly, Ripple plans to go public after the SEC lawsuit resolves).
3. Securities and Exchange Commission Lawsuit — In 2020, the SEC filed a suit against Ripple claiming that they were offering unregistered securities and some improper self-dealing. Due to the ongoing SEC lawsuit, Ripple is largely unavailable in the U.S. and nearly all of its customers are outside of the U.S., with a significant amount of them in Southeast Asia.
Should we buy XRP given the Pros and Cons?
Clearly, the lawsuit with the SEC stands as the major sticking point to date. We love that, despite the more centralised finance provided by Ripple’s network, it serves as a middle ground, you can pay with any type of currency and the transactions are easy and traceable. However, with the lawsuit’s uncertainty looming large, there is risk. XRP, the Ripple digital token, ended yesterday (10 May) at $1.44. Looking at the chart, support at $1.70 should hold up. Recent highs are $1.9650.
As for the “Ripple” effect?
Should the company and the SEC resolve the lawsuit, the ripple effect could be quite large, creating FOMO for those of us who have stood by waiting for resolution.
Nonetheless, the vision and benefits of XRP are compelling going forward. Therefore, we do not mind catching one of the outer ripples just to be sure we are speculating with a good trading plan after the fact rather than gambling in hopeful anticipation.
To find out more, you can join Mish and MarketGauge’s Crypto expert Holden Milstein next Thursday 13 May at 7 PM EST on XRP Clubhouse when we bring you Floor Trader Secrets to Improve Your Trading of all cryptocurrencies. https://www.joinclubhouse.com/event/P9gZEQoY
You can follow Mish on Twitter @marketminute and Instagram @mishschneider.