Invest in This Leading Cryptocurrency, Suggests an Ex-Goldman Sachs Analyst, Anticipating a 120% Surge
With a staggering 480% surge over the past three months, XRP, the native token of Ripple's blockchain, has catapulted itself into third place among the most valuable cryptocurrencies, trailing only Bitcoin and Ethereum. Dom Kwok, a former Goldman Sachs analyst, even speculates that XRP's value could eclipse Ethereum's in the near future, requiring an additional 120% increase in XRP's price. Let's delve into XRP's unique offerings and potential catalysts to see if this forecast could come to fruition.
What sets Ripple apart from other cryptocurrencies?
Ripple's blockchain serves as a platform for real-time payments, remittances, and currency exchange transactions, pitching itself as a more affordable, swift, and secure alternative to SWIFT. Some financial institutions, such as Travelex Bank, Tranglo, and Sentbe, have already incorporated Ripple's XCurrent network for their transactions.
While Ripple's main goal with XRP was to have its customers utilize the token for financial transactions, most initially opted to merely use XCurrent for processing fiat currency payments. Launched at $0.0058893 per token in 2013, XRP hit a record high of $3.84 in January 2018 due to Bitcoin's rising popularity.
However, two significant challenges weighed down XRP's price in 2020. The U.S. Securities and Exchange Commission (SEC) sued Ripple, claiming their initial XRP token sales were unregistered securities offerings. This lawsuit led to delisting on major trading platforms, loss of partnerships, and closure of Grayscale's XRP Trust. Additionally, XRP's supply was pre-mined and lacked the scarcity and utility of other leading cryptocurrencies, which made it appear less appealing as a long-term challenger to Bitcoin and Ethereum.
So why is XRP's price skyrocketing?
The SEC lawsuit's conclusion in August 2021 with a lighter fine sparked optimism. However, the SEC's recent appeal and Trump's appointment of crypto-friendly Mark Uyeda as acting SEC chair have kept XRP's price from fully recovering.
Despite these challenges, significant milestones have emerged. Major trading platforms resumed listing XRP, Grayscale restarted its XRP Trust as a closed-end fund for accredited investors, and firms registered to sponsor their own spot XRP ETFs. The strongest catalyst for XRP came last November, when Donald Trump won the U.S. presidential election. Trump's proposed looser crypto regulation and Uyeda's crypto-friendly leadership prompt expectations that the SEC would abandon its case against Ripple.
In December, the New York Department of Financial Services also approved Ripple's planned stablecoin tied to the U.S. dollar. This approval could encourage more financial institutions to adopt Ripple's blockchain, stabilizing XRP's price. Finally, Ripple's efforts to integrate smart contracts and promote itself as a tokenization platform for real-world assets could appeal to Ethereum developers and users, expanding its ecosystem and increasing XRP's use.
But will XRP's price soar another 120%?
Kwok attributes XRP's future success to a relaxed regulatory environment and Ripple's rising prominence as a tokenization platform for real-world assets. While these factors are indeed positive, it remains uncertain if XRP will surpass Ethereum's market value in the near future. Ethereum's widespread use as the foundation for a range of tokens and dApps makes it a formidable contender. Nevertheless, brighter days might still be on the horizon for XRP.
Given Ripple's successful integration of real-time payment services and its growing adoption by financial institutions, individuals who are interested in investing in the finance sector might consider adding XRP to their portfolio. As the SEC lawsuit's resolution and the appointment of Mark Uyeda as acting SEC chair have brought optimism to the crypto market, investors may see potential returns from investing in XRP.
Furthermore, if Ripple manages to overcome the challenges posed by its pre-mined supply and regulatory hurdles, the company's plans to promote smart contracts and tokenization of real-world assets could attract Ethereum developers and users, potentially increasing XRP's use and value in the future.
