No highs without lows: XRP/USD forecast
XRP is one of the largest cryptocurrencies by market capitalization. It’s ranked third, right after Bitcoin and Ethereum! The XRP/USD price is $0.33 as of the end of August 2018. After XRP skyrocketed at the end of 2017, it has been going down with occasional price spikes. However, some investors claim that the currency might grow up to $5 or even $10.
Due to the high volatility of all cryptocurrencies, it’s impossible to predict price changes with certainty. Always do extra research, evaluate risks, and invest wisely via credible cryptocurrency exchanges. But first, let’s explore what XRP is and what practical value it holds.
The essence of XRP
The main idea of the Ripple network (which is powered by XRP) is to replace existing money transfer systems like SWIFT with more reliable ones. Ripple is a payment processing network of a new – blockchain-based – type. It aims at facilitating fiat and crypto transactions, making them faster and cheaper. Some large banks like UBS and Credit Agricole have already applied this technology and became the RippleNet members.
Unlike most popular cryptocurrencies, XRP is based on the consensus algorithm – it doesn’t use PoW or PoS principles, it uses a so-called proof-of-correctness instead. XRP coins aren’t mined. The overall amount of 100 billion coins has been produced at the start of the project – about 40 billion of them are circulating on the market and the rest is held by the Ripple Labs organization. This central entity adds 1 billion to a free circulation monthly. Overall, XRP tokens are designed for paying the network fees or acting like intermediary currency for closing deals.
Ripple is a pretty solid system with a six-year history and a huge audience – it’s safe to say that it will survive in the future. Let’s see what are the advantages and disadvantages of using Ripple.
Strengths
Here are some reasons why the price of XRP may increase:
[if !supportLists]● [endif]Fast network. Ripple is able to process around 50,000 transactions per second. Compare this to only 3-6 transactions Bitcoin processes per second.
[if !supportLists]● [endif]Cheap transactions. Participants pay system’s fees with XRP which are really cheap. Fees protect the network from spam orders and DDoS attacks.
[if !supportLists]● [endif]Versatility. XRP is a financial intermediary for exchanging digital assets. It’s valid not only for fiat or crypto as the system supports stocks, bonds, and even bonus miles.
[if !supportLists]● [endif]Growing acceptance. Banks, exchanges and other financial services start using Ripple along with SWIFT. This fact plays the key role in the future rise of XRP’s price.
Weaknesses
Though there are many advantages indicating that Ripple has a viable future, there are also some reasons why Ripple may continue going down:
[if !supportLists]● [endif]Large number of coins. There are 100 billion XRP, and that’s a lot. Bitcoin has 21 million units only. Such a plenty of tokens may lead to inflation.
[if !supportLists]● [endif]Centralized control. All coins were pre-mined, and now the central system controls them. It contradicts the main idea of a decentralized nature of cryptocurrency.
[if !supportLists]● [endif]Growing acceptance. Paradoxically, this fact can also cause the fall of Ripple. The project may lose a lot of traditional investors who don’t want to see crypto as a banking instrument.
What charts can tell about the future of XRP
Looking back at January 2018, we could spot the all-time XRP high of $3.29. Now it’s more than six times cheaper. The main reason for the decrease is the fall of Bitcoin and the general situation in the market.
As of August 31, 2018, XRP follows an upward trend showing a 24-hour increase of 0.45% against USD. According to TradingView, XRP has touched the support level that might lead to a potential bounce in price. ForexTrading has also made some analysis that shows the current XRP’s growth rate of -31% per month, indicating it should take over two months for XRP to reach at least $0.5. One more price analysis website, WalletInvestor, doesn’t see XRP skyrocketing in the near future either. They believe that the coin’s price can reach $0.8 in one year, and creep to its previous all-time high (around $3.2) by 2023 only.
As you might notice, the long-time forecast is modest but quite optimistic. There is a well-known tendency that after a major fall goes a significant growth. XRP has a solid community support. Some members even claim that it can become bigger than Bitcoin and gain in value significantly (up to 540% or $6).
Still, all those predictions are bold and can be seen as absolutely accurate. To have more information on price movements, you need to do much research and learn how to read charts on your own. For this purpose, you can subscribe for technical analysis websites that publish reports on a regular basis or use inbuilt tools on crypto exchanges.
The bottom line
XRP is the 3rd cryptocurrency by market cap. It remains quite cheap because of the ideas this project represents. The Ripple network aims at providing instant cross-platform transactions, which is a long-awaited solution for the cryptocurrency world. Despite being innovative and usable, XRP stands a good chance to increase just as quickly as it can fall, because even minor failures might cause a price crash. So, even if you are a true believer in XRP, always spread the risk by diversifying your portfolio.
XRP can be bought with fiat dollars, credit cards, or debit cards on cryptocurrency exchanges such as CEX.io and Changelly.
About the writer: Mary Callahan
As an expert on Bitcoin-related topics, I've found myself as a Journalist at TheCryptoCoinCenter.com and also Cex.io - cryptocurrency exchange. I'm working on articles related to blockchain security, bitcoin purchase guides or bitcoin regulations in different countries.
