Wednesday, December 11 2024

Buying vs. trading Ripple

Ripple aims to replace the traditional payments system. It was created in 2012. If you want to buy XRP, you will need to use a third-party broker or exchange. However, not all platforms are suitable for everyone, so its best to do some research before choosing an exchange.

The first thing that you need to decide is whether you want to own XRP or store it or invest it via a CFD. Investing in Ripple via CFD will not allow you to withdraw your coins out of the broker, but it will enable you to speculate on the price of XRP without having to worry about the storage.

Buying XRP:

When buying XRP, you own it and have the right to sell and transfer it whenever you like. When you have bought the coins, it can be used just like fiat currencies for payments and purchases. Buying XRP is safer than trading with margin or with borrowed funds.

Trading XRP:

Trading XRP with CFDs doesn’t need you to own it; you own representation of Ripple, which is in the form of a contract. It is usually associated with shorter-term positions as Ripple using margin accrues fees quickly. As you are buying contracts on margin, there is a higher risk.

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Is Ripple risky?

The Crypto market is a volatile market that presents opportunities as well as risks to the traders. In 2017, XRP’s price soared from $0.006 to over $3. As adoption and awareness continue to increase, the price of XRP will keep on increasing. Ripple allows the money transfers with minimum fees, and it is well known for its connection with the banks and financial institutions.

In the current traditional system, payments between the banks take 3-5 days until they are settled, and it has high failure rates and costs approximately $1.6 Trillion annually.

For the past few years, Ripple has focused on establishing key partnerships with reputed players from the banking sector. Ripple has partnered with Santander, American Express, SBI Remit, Moneygram, etc. All these factors show that Ripple has enormous potential and can give the returns that all investors crave for.

Factors impacting Ripple

Ripple is often compared with Bitcoin as they both have few things in common – both have gained reputations as they have a huge market cap. However, both differ in a few things. Ripple is not based on the blockchain technology; it is a technology which is like the consensus-based distributed ledger. Here are certain factors that affect the price of XRP:

  1. Media interest – Ripple’s team, has finance, technology, and fintech experts who focus on customer acquisition and partnerships. Ripple has many clients who actively use RippleNet. Additionally, Ripple has used strategic partnerships to create a certain ‘hype’ which has evolved into an organic press. Ripple is putting a huge effort into building its media presence.

  2. South Korean Ripple holders have a huge influence on XRP – The three biggest Korean crypto exchanges make more than 50 percent of the XRP trade every day, which became evident when CoinMarketCap suddenly removed Korean exchanges from its pricing statistics that resulted in the vanishing of $200 million in XRP.

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