Trade Alert

Trade Alert - Ripple XRP?

_{Posted by Club Member Willie 007 18.7.23}

Ripple (XRP) just had a major win against the SEC, XRP is up over 55% since the news broke!

I know a lot of the hype around Alt coins has faded, and understandably so, as most Alt coins have zero utility and zero use case, and were therefore destined to fail.

But, XRP, on the other hand, has real utility and already has real word adoption. Currently, over a hundred banks and payment providers are using Ripple’s network (RippleNet) to facilitate cross-border transactions. Most of these institutions are based outside the US, given the litigation between Ripple and the SEC no US financial firm could realistically work with Ripple. However, with the latest court ruling, perhaps US banks could soon join its offshore peers in embracing XRP for cross border payment processing?

I had in the past looked at XRP, but had never invested as I thought surely the project will be buried by the SEC. Now that it has survived the SEC case, perhaps it’s time to take a long position.

There’s a finite amount of XRP tokens (total 100 billion XRP token supply), all pre-minted. These XRP tokens are used as the medium of exchange on the Ripple network to facilitate cross-border payments between banks. So, the future value of XRP is directly linked to the volume of transactions its network facilitates.

Ripple is competing against SWIFT, the current system used for international transactions. While Ripple appears to be the superior technology, i.e., it’s faster and cheaper than SWIFT, the incumbency and network effects of the legacy SWIFT payment network might be hard to overcome. Banks may value operational stability and may be resistance to change, and even if they were to embrace a new technology such as Ripple’s network, I suspect implementation will be slow given the need to overhaul existing internal processes.

That said, in a rational economic environment, the superior product usually wins over the long run. Which is why I think it’s worth initiating a small position in XRP here.

Is anyone else also looking at XRP? There’s one thing about XRP that does give me some pause, that being the fact that Ripple (the parent company) controls most of the supply of Ripple?!?

Visit the Daily Market Exchange to join the discussion for XRP.

Subscribe to receive more Trade Alerts!