There are so many different cryptocurrencies for people to choose from today, so much so that it can often be overwhelming. One of the recent coins that have been getting a lot of attention is Ripple, as people seek cheaper alternatives to Bitcoin that have great potential. But should you invest in Ripple? Is this the right choice for you?
Below, we will take you through the pros and cons of investing in Ripple so that you can make a well-rounded and thorough decision.
What is Ripple?
Ripple is a type of technology that acts as a digital payment network for monetary transactions and also a cryptocurrency (XRP). It was co-founded by two computer programmers, Jed McCaleb and Chris Larsen.
If you are new to the world of crypto, we do recommend doing some further research before diving right in. According to the LearnCrypto blog, it helps to have foundation knowledge so you can make the best decisions.
Is Ripple a good investment?
One of the reasons why people view Ripple as such a good investment is because it is affordable. The price of Bitcoin and Ether has skyrocketed in recent years. A lot of people find that these coins are too expensive to invest in now. So, it is all about finding the next big opportunity; something offering value. Ripple falls into this category.
You also need to consider the fact that Ripple is more than technology or a cryptocurrency. It is a fully-fledged business. There are more than 500 full-time employees working at Ripple Labs Inc. This gives a lot of people confidence because they know that there is a lot of effort going into the success of Ripple.
Another strong sign of investor confidence is the large market cap associated with Ripple. This is set at around $35 billion. A large market cap like this is an evident indication of investor confidence, ensuring assets are more resistant to volatile dips or market cycles.
Are there any drawbacks?
As is the case with any potential investment, you always need to consider the potential drawbacks as well. Firstly, Ripple is not decentralised. Unlike Bitcoin, which people mine and then anonymously exchange, Ripple was designed with the finance and banking sector in mind. The primary purpose was to resolve problems in the banking sector.
It is also worth pointing out that Chris Larsen, the chairman, owns around a third of all XRP. Also, senior board members, such as CEO Brad Garlinghouse, also hold a significant amount. The price could, therefore, be overinflated.
Investing in Ripple is a personal decision
As you can see, there are pros and cons associated with investing in Ripple. One thing we must stress is there are never any certainties when investing in anything, and cryptocurrency is a rather volatile market. This is why it is imperative to make sure you never invest more than you can afford to lose.