The origins of blockchain payment network company Ripple (XRP) go back as early as Bitcoin (BTC), with some believing XRP predates the concepts behind the bellwether cryptocurrency by four to five years.
As BTC went on to dominate the cryptocurrency universe, the Ripple-developed XRP has lagged behind. XRP, which was once valued higher than ethereum (ETH), has underperformed its rivals due to an ongoing lawsuit filed by the US Securities and Exchange Commission (SEC) against Ripple.
In this article, we will discuss the future of the Ripple blockchain and XRP. We will focus on the SEC lawsuit and draft a plausible long-term XRP price prediction for 2030 and beyond to help you decide whether you should invest in Ripple-linked cryptocurrency or not.
XRP price prediction 2030–2050: What is Ripple and XRP ?
The XRP Ledger (XRPL) is an open-source public blockchain that anyone can develop on and use for transactions. David Schwartz, Jed McCaleb and Arthur Britto began the development of XRPL in 2011 with the intention of creating a global decentralised payment system that is more scalable and efficient than bitcoin – one that is “built specifically for payments”.
XRP, the native cryptocurrency of XRPL, was launched in 2012. XRP is a payment token used to facilitate transactions and provide liquidity for currency swaps between cryptocurrencies and fiat currencies.
As the United States Government Accountability Office (US GAO) explained in a report on virtual currencies:
“Ripple allows users to make peer-to-peer transfers in any currency. A key function of XRP is to facilitate the conversion from one currency to another. For example, if a direct conversion between Mexican pesos and Thai baht is not available, the pesos can be exchanged for XRP, and then the XRP for baht.”
Shortly after the launch of XRPL in 2012, Chris Larsen, executive chairman and former CEO and co-founder of Ripple, joined the team. The group formed a company known as NewCoin, which was renamed Ripple.
Running parallel to the XRP Ledger is RippleNet. RippleNet is a global financial network similar to the SWIFT (Society for Worldwide Interbank Financial Telecommunications) banking system, but one that is built on blockchain technology, thereby making it decentralised, transparent, faster and cheaper than its traditional counterpart. RippleNet leverages XRP to provide liquidity for cross-border transactions.
Today, RippleNet facilitates over 120 currency-pair transactions across more than 55 countries worldwide, according to its website. Some of the financial institutions using RippleNet include Bank of America, American Express, Santander, IndusInd Bank and Siam Commercial Bank, among others.
It has to be said that XRP assets and Ripple are separate entities, although inherently related. Ripple is a centralised fintech company that developed the XRP Ledger. The XRP Ledger is a decentralised public blockchain network maintained by the XRP community with Ripple running six of the 35+ validators on the network’s unique node lists (UNLs).
“UNLs are the lists of validators a given participant believes will not conspire to defraud them. Each server operator can choose their own UNL, usually based on a default set provided by a trusted publisher,” said XRPL’s website.
The website added that Ripple, XRP Ledger Foundation and Coil publish a recommended default list of high quality validators, based on past performance, proven identities, and responsible IT policies.
What is the future of Ripple?
XRPL’s technology is seen as a disruptive force within the global financial system. However, in recent times, Ripple and XRP are more dominantly associated with an ongoing lawsuit between the SEC and Ripple. The XRP price over the years will be highly dependent on the outcome of the lawsuit.
In December 2020, the SEC filed a lawsuit against two Ripple executives, executive chairman of the board and former CEO and co-founder Christian Larsen and current CEO and member of the board of directors Bradley Garlinghouse, alleging that they raised over $1.3bn through an unregistered, ongoing digital-asset securities offering.
The SEC argued that XRP is a security rather than a currency and should be regulated by the market watchdog. In its lawsuit, the SEC said Ripple raised billions of dollars via the sale of XRP to finance the company’s business. It also alleged that Larsen and Garlinghouse profited by over $600m from “personal unregistered sales of XRP”.
A SEC complaint filing read:
“Garlinghouse did so while repeatedly touting that he was ‘very long’ XRP, meaning he held a significant position he expected to rise in value, without disclosing his sales of XRP.”
The SEC also alleged that “Ripple viewed the Institutional Sales as the lynchpin of its strategy to generate speculative interest in XRP from public investors”, with Ripple making sales worth over $624.8m to at least 26 institutional investors from 2013–2020.
Ripple made many of XRP institutional sales at discounts between 4% and 30% of the market price. The deals did not provide restrictions on the buyer’s ability to resell XRP and had only “brief” lock-up periods and limited buyer’s ability to resell quantities of XRP, according to the SEC.
“In other words, Ripple expected that most, if not all, Institutional Sales buyers would sell their XRP into public markets and tried to protect XRP’s trading price by limiting the amounts that could be resold during any given time period. By selling at discounts to market prices, Ripple incentivised these buyers to seek to sell their XRP into the public markets in order to realise what was essentially a guaranteed profit,” claimed the SEC.
After over a year, the question at the heart of the lawsuit is currently focused on whether Ripple executives were aware of the risk that XRP could be deemed a security and whether they were warned by their lawyers before the XRP sales.
Ripple has asserted that “it lacked fiat notice that its conduct in violation of law, in contravention of Ripple’s due process rights”. District Judge Analisa Torres denied SEC’s motion to strike Ripple’s fair notice affirmative defence in early March 2022.
However, a court document dated 11 March 2022 revealed that in February and October 2012 an unidentified law firm provided “two legal memoranda assessing the potential legal risks involved with Ripple’s then-proposed business plans.”
A 2020 court document showed that Ripple requested the following language be added to the risk disclosures in 2015:
“The Ripple ecosystem’s reliance on the efforts of Ripple Labs – the single-largest holder of XRP – to promote and expand the ecosystem creates greater risk that XRP might be deemed a security as compared to other virtual currencies, and Ripple Labs might be deemed to be operating as an unregistered securities exchange, broker or dealer under federal and state securities laws.”
Documents also disclosed that in its defence, Ripple said XRP holders “do not acquire any claim to the assets of the company, hold any ownership interest in Ripple, or have any entitlement to share in Ripple’s future profits”.
It was also revealed that in June 2018, the SEC’s then-director of corporate finance stated the SEC did not consider bitcoin and ether to be securities. Later in 2019, SEC staff met with a “digital asset platform that was considering listing XRP” who sought guidance on where XRP was considered a security by the SEC. At the time, “the SEC did not say that it considered XRP to be a security” and the platform went on to list XRP, court documents revealed.
Ripple also faces a class-action lawsuit filed in May 2018 by Ryan Coffey, alleging that Ripple “earned massive profits by quietly selling off this XRP to the general public” calling it “a never-ending initial coin offering”.
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“Unlike cryptocurrencies such as bitcoin and ethereum, which are mined by those validating transactions on their networks, all 100 billion of the XRP in existence were created out of thin air by Ripple Labs at its inception in 2013,” said 2018 court filing.
According to CoinMarketCap, the maximum supply of XRP stands at 100 billion tokens.
XRPL’s website states XRPL founders decided to “gift” XRP80bn to Ripple in exchange for “Ripple developing on the XRP Ledger”. As of March 2022, data from Ripple’s website showed Ripple held over 5.75 billion XRP tokens while 48.13 billion XRP tokens were distributed. Over 46.1 billion XRP tokens were placed in escrow accounts.
XRP price history: Fall from No. 2
As of 6 April 2022, XRP is the eighth-largest cryptocurrency with a market capitalisation of over $37.3bn. Data from crypto exchange Coinbase showed XRP has gained over 17,000% since 12 August 2013, from about $0.0044 to its current price of about $0.78.
The digital payment token was the second-largest cryptocurrency by market capitalisation in January 2019 ahead of smart-contract platform leader Ethereum. XRP’s all-time high currently stands at $3.37 reached on 7 January 2018. Since then, the token has been on a downward trajectory hurt by the SEC’s lawsuit. As of 7 April, XRP is 79.81% below its record level, data from CoinMarketCap showed.
More recently, XRP has rallied alongside the broader cryptocurrency market, with prices jumping over 11% in the past month. However, the recent surge has not been enough to help XRP post positive returns in 2022. XRP is down by over 2% year-to-date.
At the time of writing, data from CoinCodex showed XRP’s 50-day and 200-day exponential moving average (EMA) was currently at $0.798706 and $ 0.841097, respectively, with the former indicating a ‘buy’ and the latter indicating a ‘sell’. As of 7 April, XRP’s 14-day Relative Strength Index (RSI) was at 44.39, indicating that the crypto is neither overbought nor oversold, so the position remains neutral..
Is Ripple a good long-term investment ?
According to technical forecast website Wallet Investor, XRP is an “awesome long-term (one-year) investment”.
“Our AI cryptocurrency analyst implies that there will be a positive trend in the future and the XRP might be good for investing for making money,” added Wallet Investor.
The Ripple price in future was expected to rise to a maximum of $1.322 by the end of 2022, according to Wallet Investor. The crypto was predicted to jump further to a maximum price of $3.288 by the end of 2025. By the start of 2027, XRP is expected to hit a maximum price of $3.997, according to Wallet Investor’s Ripple 5-year forecast.
According to Price Prediction’s long-term XRP/USD forecast, Ripple could hit a maximum price of $1.22 in 2022. XRP future value was seen reaching a maximum price of $3.67 by 2025. Price Prediction’s Ripple price future forecast expected the cryptocurrency to surge to a maximum price of $24.16 by 2030. XRP maximum price target for 2031 was set at $36.80.
According to Digital Coin’s long-term Ripple price prediction, the XRP token price was expected to rise to a maximum of $1.69 by 2025, following which XRP was forecast to more than double its price by 2030 to a maximum of $3.68.
In Digital Coin’s Ripple growth forecast for 2022, the average projected price for XRP is set at $1.02.
For the short term, Coin Codex expected the value of XRP to drop by 9.8% to about $0.68 by 11 April 2022. CoinCodex added that technical indicators showed the current sentiment for XRP was ‘bearish’, while the fear and greed index indicated ‘fear’ among XRP investors.
“Based on our XRP forecast, now is a bad time to buy XRP,” said CoinCodex on 6 March 2022.
How do you invest in Ripple?
Ripple is a centralised fintech company behind the development of the XRP Ledger and the XRP token.
Since Ripple is not a publicly listed company, retail investors cannot buy shares of Ripple. However, retailers can buy XRP tokens on various centralised and decentralised crypto exchanges. According to XRPL’s website, the top exchanges with XRP listings are Bitstamp, Kraken, Cex.io, Liquid, LMAX Digital, BitFinex, Etoro, Currency.com, Bittrex and FTX.
When looking at crypto price predictions, investors should remember that the market is volatile. Forecasts are based on inferences drawn from the past performance by analysts, and may go wrong due to market gyrations, change in policies and unknown parameters. Investors should also consider the token’s collaborations, partnership deals and fundamentals before relying completely on the predictions.
You should do research and base your decision to buy cryptocurrencies based on your attitude to risk. You should gauge how comfortable you are with losing money and never invest money that you cannot afford to lose.