Today, we look at a crypto currency called Ripple (Ticker: $XRP).
We explain at a high level what it is and its use, and then why it is one of the best investments you can make right now.
Released in 2012, Ripple is a global currency exchange and network. It’s primary goal is to allow instant and secured global financial transactions of large size. This means I can send Joe Schmo, from across the world, money in a matter of seconds, not days. This process of sending ANY currency on the Ripple ledger is known as “rippling.” As explained by Golden.com, “Ripple provides a path-finding algorithm that connects the two parties through indirect trustlines. This mechanism is called ‘rippling’ and consumers who have multiple gateways in the same currency can ‘allow rippling’ on their account to receive a small transit fee for allowing inter-gateway liquidity.” So similar to Bitcoin’s reliance on blockchain, Ripple uses a ledger. Bitcoin’s average transaction takes 10 minutes, Ripple’s takes five seconds!
It’s okay if that went completely over your head. The important part here is why you should invest in it. First of all, some facts. First of all, out of the cryptocurrencies out there Ripple has the THIRD largest market cap behind bitcoin and Ethereum. What does this mean? There is a ton of investment into it, and it has a ton of room to run. Ripple is also used by the global bank UBS, and other companies including UniCredit and Santander.
Okay but why not Bitcoin or Ethereum? Why Ripple? First off, the correlation coeffecient between Bitcoin and Ripple is .79. (The correlation coeffecient ranges from 1 to -1 with 1 being the most positive relationship). This is a very close relationship, so we know that if Bitcoin is on a run Ripple likely is too. You may have seen Bitcoin is on a bull run right now recently crossing 11,000 and hanging out right now between 11.5k to 11.9k. Back in 2017, Bitcoin hit it’s all-time high (ATH) of around 20k. So, bitcoin is about 42% away from its ATH. Meanwhile, Ripple is at 31 cents. It’s ATH is about $3.00, so it is about 90% off its all-time high. Wow! This should raise your eyebrows because at least to me Ripple has so much more room to run. Buying right now at about 30 cents is a great discount.
Why is ripple so far from its ATH? When bitcoin dipped to the 7-8k levels this past year, Ripple kept dipping as well and couldn’t find any support levels until the 20 to 25 cent range. I bought more here, while still holding my old Ripple from around 48 cents and 41 cents.
Also, one last HUGE point, when looking at the old graphs from 2017’s run. Bitcoin peaked in late december, while the rest of the altcoins (ETH, LTC, XRP) didn’t hit their peaks unitl mid-January 2018. So, if you’re wary that Ripple isn’t going to follow bitcoin’s run.. I’d say rest your worries. Case closed. Have a great day and don’t forget to smile! 🙂