XRP: Price Analysis Of The Sensational TokenAdmin
The well-known XRP token from Ripple, which appeared long before the creation of bitcoin, does not cease to remind of itself from time to time. In 2022, we are approaching the end of a lawsuit between the SEC and Ripple Labs that has been dragging on since the end of 2020.
Today we will tell you what Ripple and XRP are, how this token differs from the cryptocurrency we are used to, and we will make a forecast for the price of the coin by the end of 2022.
Table of Contents
XRP – Ripple Cryptocurrency
Ripple is the company behind the XRP token, as well as a settlement system and currency exchange network that can process transactions worldwide.
Ripple was designed from the very beginning as a replacement for SWIFT (the leading money transfer network) or, simply put, it replaces the level of settlements between large financial institutions.
It serves as a trusted agent between the two parties in a transaction as the network can quickly confirm that the exchange went through correctly. Ripple can facilitate the exchange for various fiat currencies and cryptocurrencies, such as bitcoin.
Whenever users make a transaction on the network, the network deducts a small amount of XRP, a cryptocurrency, as a fee.
By itself, the Ripple company initially built a development strategy through cooperation with the government and banks. It was created much earlier than the first cryptocurrencies appeared. Therefore, its token is significantly different from the currency on the blockchain.
XRP is a cryptocurrency powered by the XRP Ledger blockchain. Notably, the XRP blockchain works a little differently than most other cryptocurrencies. Other cryptocurrencies open their transaction ledgers and verification processes to anyone who can quickly solve complex equations. But the transactions are secure as most wallet holders must agree to verification in order for them to be added.
The Ripple XRP network centralizes data to some extent and uses a consensus algorithm: it maintains unique lists of nodes that users can choose to verify their transactions based on which participants they think are least likely to scam them.
As new transactions come in, validators update their ledgers every three to five seconds and check if they match other ledgers. If there is a discrepancy, they stop to find out what went wrong. This allows the network to securely and efficiently validate transactions, giving it an advantage over other cryptocurrencies like bitcoin.
What affects the change in the price of XRP?
The difference between the XRP network and the ones we are used to is what made it so popular. Of course, it cannot be separated from the general mass of coins, as it, along with everyone else, follows broad market trends, but its price is also influenced by the work of financial institutions in the real world.
For example, its all-time high of $3.3 in 2018 was achieved due to the fact that Ripple was testing with a number of financial institutions, including the very large American Express and Santander.
Its price was also helped by news in December that Japan’s SBI Holdings and SBI Ripple Asia, formed from a partnership between the two firms in 2016, formed a consortium with Japanese credit card companies to use blockchain.
But there are also reverse examples, when the price has fallen sharply. In December 2020, the SEC (Securities and Exchange Commission) filed charges against Ripple Labs. The regulator accused the company of selling $1.3 billion worth of unregistered securities under the guise of cryptocurrency – the SEC considered XRP tokens to be securities.
And right after that, some American exchanges closed trading with the XRP coin, and this significantly hit the price of the token, it dropped from $0.5 to $0.2 in 3 days.
XRP news and forecast for the future of the coin
The trial is still ongoing, but in the fall of 2022, the parties have already come to the conclusion that the case should be completed in a simplified manner, since the court has enough evidence to pass a sentence. This news favorably affected the value of the XRP asset.
This is far from the best times of RippleNet in 2021, when the network was in great demand, and the number of transactions and the volume of payments grew exponentially.
Factors pointing to a favorable future for XRP and Ripple:
- XRP is not mined. Ripple is the sole issuer of the token and releases it at 1 billion monthly. Therefore, all income from XRP goes directly to Ripple, which allows it not to go bankrupt in the near future.
- The number of coins is decreasing. XRP is used for commissions in transactions on the Ripple network and, accordingly, is constantly burned, which reduces its total amount. Due to the reduction in supply, the cost will increase. However, the commissions on RippleNet are completely miserable, so the process is very slow and will only yield long-term benefits.
- Introduction of technologies using XRP. Ripple is actively working on this, but so far their xRapid is not very popular. With the advent of other technologies, this may very well affect the coin in the future.
To sum it up, XRP is a very good long-term currency to add to a portfolio. You need to buy it regularly and think about income not for the next month, but for 1 year or 5 years.
It is advisable to buy it at $0.44~0.45 with the end of litigation in favor of Ripple at least, you can expect a return to the level of May 2022 by $0.6, or even break through the historical maximum.
If Ripple loses, the correction will continue more rapidly. And then it remains to wait for the bull in the entire cryptocurrency market to see a tangible increase for XRP.