The volatility of virtual coins has a justification. Popular cryptocurrencies (including Ripple) have experienced significant growth in recent months, driven by the excitement and increased demand from traders. The resulting financial “bubble” could not “inflate” indefinitely. The moment of correction came when the price dropped and the search for the real rate began. As soon as the balance between supply and demand is reached, volatility will decrease and the price will go up.
Considering the long path of the company to success, we can talk about great prospects.her product. If Bitcoin appeared only in 2009, Ripple (albeit in the form of a company) started operations earlier. Ripple’s management pays a lot of attention to the development of the platform, signing agreements with new banking institutions, promoting XRP on cryptocurrency platforms. Below we will consider the reasons why the rise in the Ripple rate is a matter of time.
- Global idea
The main difference between the Ripple system and other virtual currencies lies in the initial concept. The developers of Bitcoin, Litecoin, Ethereum and other cryptocurrencies set the task of replacing fiat money over time and creating a single money space. In the case of XRP, the situation is different. From the first day of the release of Ripple, the creators set a goal to introduce the platform into the banking sector and replace outdated SWIFT payments.
- Freezing 55 billion coins
Centralization was considered the main problem of Ripple for a long time – the concentration of more than 60% of the coins in the hands of the company. This state of affairs caused distrust of potential investors (banks, companies and individuals). No one could guarantee that Ripple’s representatives at a certain moment would not throw a large volume of coins on the market, which would lead to a collapse in the exchange rate.
To reassure investors and attract additional funds for the development of the company, the creators took the right step. At the end of December 2017, they closed 55 billion XRP in a dedicated escrow account. Initially, such intentions were announced in May, but the practical implementation was completed only at the end of 2017. Such an event had a positive effect on the market price of Ripple and became one of the factors in the growth of the virtual coin.
- The uniqueness of the structure
Despite the fact that XRP is pegged to classic cryptocurrencies, it cannot be fully called virtual money. The fact is that Ripple is issued in full, mining is not provided, and the system itself is centralized. Many experts attribute these features to the platform’s disadvantages, but in practice, when it comes to regulation and legality, Ripple is always one step ahead.
- Burning commission
The future growth of the Ripple rate is provided by another factor – the presence of a technical commission of 0.00001 coins. It is charged from each payment made within the network, and then expires. As a result, the number of XRPs is decreasing every year. Unlike fiat money, which is constantly being printed, and other cryptocurrencies subject to mining, Ripple is not afraid of inflation. On the contrary, a gradual decrease in the number of coins triggers deflationary processes. The market price of XRP to PHP, albeit insignificantly, should rise.
- Large investments
Considering the question of whether XRP will grow in the coming years, it is worth paying attention to investors who have already invested in the project. It is difficult to imagine that large companies and banks will invest millions of dollars in an obviously unprofitable project. Ripple’s partners already include such giants as the National Bank of Abu Dhabi, MoneyGram, Itai Unibanku (the largest bank in Latin America), investment funds and other organizations. Paypal has no support for XRP till now, but you can buy Ripple with PayPal using a peer to peer exchange.
An additional guarantee was the “freezing” of 55 billion coins on the escrow account, as mentioned above. Ripple plans to release 1 billion XRP to the market each month, allowing the process to stretch over 4.5 years. As a result, all Ripple coins will be in circulation by mid-2022.