Cryptocurrencies are the heart and soul of many investors and bankers. As the new projects are on the rise in the industries, the digital coins have empowered their status. Also, among those digital coins is Ripple’s XRP.
Ripple XRP is the third leading cryptocurrency in the market. XRP was formed to use as a token to enable a smooth transfer of currency across borders through the Ripple network. The operation of Ripple XRP is different from other coins as it also offers exciting and new opportunities for investors.
So many people are interested in Ripple XRP for some reason or the other, and now its increasing usage in the banking system leads to one question. Is Ripple (XRP) a good investment in 2021?
Is Ripple (XRP) A Good Investment?
XRP is considered a good investment as it offers a huge potential to grow. Most importantly, the Ripple network takes a very low fee for currency transfers that make it popular in multinational banks.
Although Ripple XRP is an overall good investment, before investing, you need to know the pros and cons of XRP. You should check whether it is suitable for you to invest in or not.
Pros of Investing In XRP
Ripple XRP promises a great future that makes it appealing to new investors and traders. Let us look at some pros of investing in this cryptocurrency.
· Create New Opportunities
Ripple XRP helps to accelerate the flow of capital that is a boost for the economy. It is not only beneficial for large institutions, but small business owners are at an advantage too. Ripple becomes a widely adopted platform for many entrepreneurs and sole traders to access the global economy.
Ripple XRP offers an extremely low price as compared to Bitcoin. Also, with exceptional scalability, it can process 1,500 transactions in a second, which is much faster than Bitcoin.
· Third Biggest Cryptocurrency
Being the third-largest cryptocurrency, Ripple XRP has a market cap of about $25.9 billion. With such a large market cap, investors’ reliability, and trustworthiness to invest in the XRP.
Cons of Investing In XRP
There is always a risk in investment; it doesn’t matter where you invest. Therefore, you should look out for the cons of investing in Ripple XRP.
· Not Decentralized
Many investors and traders argue that Ripple XRP goes against the fundamentals of economic autonomy and decentralization. Ripple was specifically designed to solve issues of finance and banking industries. Unlike Bitcoin, it was not made to be exchanged anonymously between ordinary users.
· No New Release of Ripple XRP Coins
While there are limitless Ethereum coins and about 21 million Bitcoin, Ripple XRP coins are already in circulation, and they are pre-mined. There will be no more extra coins released in the market.
· The Company Owns A Large Share Of XRP
Chris Larsen, Chairman of Ripple, owns about a third of the whole XRP. Also, the senior members hold a significant amount of XRP in the company. When there is a huge amount of XRP concentrated in the hands of the company, there are chances of the prices getting overinflated.
The key contributors of Ripple make XRP an ideal solution for them, rather than making it an open-source solution for the finance and banking industry.
What Factors Can Affect the Price Of XRP?
While analyzing the pros and cons, you should also know what factors can affect the price of Ripple XRP in the future. It will become easier for you to make predictions about, is Ripple (XRP) a good investment in 2021.
Supply and Demand
It is well known that with an increase in demand, there is a decrease in supply. Hence, you will see an increase in price. In the case of XRP, Ripple Lab, the parent company, holds most of the XRP to keep the price in control. However, if the parent company sells all the XRP, the market will get flooded with coins, and the price will increase.
Regulations of Cryptocurrency
Changes in rules and regulations of cryptocurrency greatly affect the prices in the market. Many believe that Ripple is said to withstand any strict regulations. While the new regulations can lower the price of other conventional cryptos, it can lead to a rise in Ripple’s price.
Digital Transformation in the Financial Industry
The digital world has a huge impact on exchange rates as well as online payments. Many companies find it difficult to make payments online. At the same time, Ripple offers a smart technology, which makes it easy to make an online payment between investors.
Whale bots are hugely responsible for manipulating the price of crypto tokens. Whale bots are the one that runs software to make the trade automatically over many different assets and platforms at the same time. That may result in inconstancy and fluctuations in the price of cryptocurrencies.
What Is the Ripple XRP Price Prediction For 2021?
Ripple XRP suddenly fell in March due to the coronavirus crash. That caused a notion of uncertainty among investors regarding investing in XRP ever since Ripple has seen a bearish trend in the cryptocurrency market.
Many investors believe that the bearish trend isn’t going to affect the price of Ripple XRP. Flare Network, a partner of Ripple, is planning to build a two-way bridge with Ethereum.
By using the smart contracts of the Ethereum with Ripple, Flare Network will enhance the functionality of cryptocurrency, which will increase the demand for XRP in 2021.
So, the question is Ripple (XRP) a good investment in 2021 has a better picture now. If you are looking for the answer, then, in the end, it will depend on your investment strategy. With a market cap of $25.9 billion, it is going to rise as the payment protocols become widely adopted.
As the resource is finite, the value of Ripple will increase in the future as the demand tends to increase the price. However, every investment includes risk. Therefore, invest only after you have done proper research and know what you can afford before deciding.