Author: Hamid Rashid, Founder of FINTERRA
XRP is a digital asset built for payments by Ripple Labs Inc. It is the native digital asset on the XRP Ledger—an open-source, permissionless and decentralized blockchain technology that can settle transactions in 3-5 seconds. XRP can be sent directly without needing a central intermediary, making it a convenient instrument in bridging two different currencies quickly and efficiently.
Ripple was conceived by Jed McCaleb and built by Arthur Britto and David Schwartz who then approached Ryan Fugger who had debuted in 2005 as a financial service to provide secure payment options to members of an online community via a global network. Fugger had developed a system called OpenCoin which would transform into Ripple. The company also created its own form of digital currency referred to as XRP to allow financial institutions to transfer money with negligible fees and wait-time. In 2013, the company reported interest from banks for using its payment system.
By 2018, over 100 banks globally had signed up, but most of them were only using Ripple’s XCurrent messaging technology, while avoiding the XRP cryptocurrency due to its volatility problems. Representatives of the Society for Worldwide Interbank Financial Telecommunication (SWIFT), whose market dominance is being challenged by Ripple, have argued that the scalability issues of Ripple and other blockchain solutions remain unsolved, confining them to bilateral and intra-bank applications. A Ripple executive acknowledged in 2018 that “We started out with your classic blockchain, which we love. [But] the feedback from the banks is you can’t put the whole world on a blockchain.”
XRP Token is known as a Real Time Gross Settlement System which is a ‘currency exchange and remittance network’ that independent servers validate. The currency traded is known as XRP and transfer times are immediate. XRP can be exchanged for most other currencies with its unique selling proposition being the avoidance of fees and wait times often associated with banks. It isn’t made up of a blockchain but rather a Hash Tree and its currency can’t be mined because there are a finite number of coins – 100 billion. XRP is popular with banks and institutions though the XRP token isn’t necessarily required for each transaction.
While bitcoin remains the clear leader among cryptocurrencies in terms of market capitalization and overall adoption rates, other contenders continue to surge ahead thanks to growing adaptability and varied applications. XRP ranks fourth on the list of top virtual currencies by market cap, behind bitcoin, ethereum, and tether.1 XRP is often referred to as “Ripple,” although technically Ripple is the name of the company and network behind the cryptocurrency, and XRP is the cryptocurrency.
How has the price of XRP performed in the past?
The price of XRP has lagged the performance of many tokens, regardless of their market cap. After XRP’s initial rally to $3.40 in early 2018, shortly after being introduced to the public, it has failed to participate in the price appreciation that both Bitcoin and Ethereum have enjoyed as crypto markets recover.
While XRP’s price has bounced from its bear market lows below $0.15, the token has struggled to eclipse the $0.30 level on a meaningful basis as other tokens reclaimed far more lost ground. Although Ripple’s platform does allow for some DeFi applications, XRP has been totally ignored as DeFi tokens with far less to offer in terms of substance appreciated substantially in 2020.
XRP price prediction for 2021-2025
Given the fact that Ripple has an established global presence and banks have been working with the platform for many years, the outlook for further XRP development is good. The price action that may result from ongoing Ripple/XRP support is a more nuanced question.
It is highly likely that crypto market sentiment will remain positive until at least 2025, which is clearly helpful for XRP prices. New users coming into the crypto space may not care that XRP isn’t decentralized in the way that Bitcoin is and users may also like that XRP transactions are extremely fast.
The $0.30 level remains critical to watch from a technical perspective, as any meaningful breach of this level could lead to rapid price appreciation, which has been evident from end January 2021. It would be reasonable to speculate that XRP could achieve the $1.00 level over the next ten month at end of 2021, and if the industry adopts it as a clearance and savings token, the price may go much higher.
XRP fights back
The XRP price value has been on a surge for the past fourteen days of February alongside McCaleb’s sales continuously. The trading trend has yielded a positive return for the popular cross-border currency. Its price dropped to $0.35 last week, and the weekend triggered a rise in its price, making it roll at $0.65 in the domain.
As per the recent XRP price prediction, if the currency manages to have the short-term resistance at $0.75, it can spring to $1 quickly. The start of 2021 has seen a rise in the buying momentum of XRP investors. The sudden rise in the token price value has made traders fill their accounts with XRP in surprising figures. The accounts holding XRP between 1M and 10M have increased steadily, furthering the token’s expansion to the set trends.
The bottom line: Is XRP a good investment in 2021?
There is no doubt that XRP is well placed to participate in crypto markets going forward, but if this will lead to immediate price rises is definitely certain. As mentioned above, XRP price trajectory haven’t recovered from SC legal suite fully, but the crypto bullish market has made XRP a popular token, and this may continue in the coming months.
Disclaimer: None of what is found in this article should be considered investment advice. Much of the above analysis is based on already-released news, expected future developments and pure speculation. While we can analyse what we have seen in the past, we can not predict the future. This article also may become out of date at some point and fail to reflect current, updated prices and information. Always do your own research before investing and always (!) only invest what you can afford to lose!