This is my first, and maybe my only article, on buying a specific crypto. I am delving into it because of the unique circumstances around Ripple right now. I wrote some time back about the SEC accusing Ripple of selling XRP as securities and the lawsuit surrounding this. It is an interesting take on crypto and has some validity to it, in my opinion. That is not to say I agree with the SEC, just think it is something that must be addressed before it becomes a real issue moving forward as companies could see this an opportunity to do an end-around the SEC.
Since the lawsuit has been something I have been following for some time because it hits at the heart of crypto upending traditional financing, I wanted to write about buying XRP. So, back to the investment opportunity. Let’s take a look at some points on this:
With the overall volatility of crypto, XRP has been pretty constant in its growth. With only two outliers in December of 2017 and May of 2021, there has been consistent and steady growth. The SEC lawsuit has had minimal effect on price. This is a great sign for Ripple and XRP.
Worst case scenario with the SEC, Ripple does not operate in the US. Since this appears to be only a small segment of people holding XRP, they could be fine even if they suffer a big loss.
XRP is not just another cryptocurrency. As a payment technology, it offers transaction costs that are extremely low. Each transaction costs 0.0001 XRP. At the current price of XRP, that's a fraction of a penny. It also processes transactions quickly, with the average transaction taking just five seconds. XRP can also be used by banks to facilitate trades of one currency for another. Instead of holding various currencies, they could hold XRP and swap currencies at a lower cost.
It’s not all great. In a best-case scenario, Ripple would replace SWIFT and become the method of choice for international money transfers, but that is not going to happen anytime soon. SWIFT currently dominates the market.
Even with competing against SWIFT, Ripple’s network includes 300 financial institutions in over 40 countries. (FYI, SWIFT partners with over 11,000 institutions)
Until the lawsuit is settled, many major exchanges are staying clear of XRP.
The success of XRP and Ripple isn't necessarily intertwined. Most of the financial institutions that work with Ripple don't use XRP.
The lawsuit, while it may not affect Ripple that much internationally, it does have an emotional impact on investment, and therefor on the price.
The lawsuit will conclude at some point, meaning there is opportunity if you believe it will be positive for Ripple.
Finally, with its large market cap and popularity, once the lawsuit is concluded, the large exchanges will jump back on board, giving it a pump and make up for any price dump that has happened.
Basically, like anything else, XRP future’s price is based on speculation, but, unlike most crypto out there, XRP has a lot more functionality and lot more to judge it on. You can make a decision to invest by looking at XRP and ignoring the SEC lawsuit, or you can buy based on what you think will happen with the lawsuit. I suggest ignoring the lawsuit, as I do not think it impacts Ripple or XRP long term. Guessing on the outcome with the SEC is basically gambling, but, if you have the money, I don’t have a problem with that.