Is XRP (Ripple) a Good Investment? (2020 Outlook)
Ripple/XRP is a relatively unique cryptocurrency as it’s not very decentralized like most cryptocurrencies, and while there’s a lot of hate on centralization there are some benefits to it. Ripple is a great example of the benefits to centralization, but also the problems that arise due to centralization that we’ll touch on below.
To not bury the lead, we personally do not invest in XRP/Ripple and wouldn’t particularly say it is a good investment for reasons we outline below, and from what we’ve seen from institituonal investors and hedge funds they seem to agree that XRP isn’t really investible like Bitcoin or Ethereum is.
The Fundamentals: Will Ripple/XRP Become Something Great?
Despite Ripple/XRP being one of the top coins on sites like coinmarketcap there’s really no real-life use of it quite yet or adoption, even by those “banks” that we’ve all heard love Ripple so much and might use it one day. The fact of the matter is the banks that have partnered with ripple haven’t committed to really anything at all — and specifically haven’t made any statements nor have any reason to use XRP it’s self as the Ripple Foundation offers them direct access to the “under-layer” of XRP that it uses, thus providing no real need for the XRP cryptocurrency it’s self when it comes to their interaction with the blockchain.
That isn’t necessarily an issue, if there’s real demand for it as a cryptocurrency or “digital gold” by the general public. This is where the issues begin — from our analysis there’s little real demand and community behind ripple when compared to other cryptocurrencies. It’s less function than things like Dash, Ethereum, Monero, or Bitcoin, and it doesn’t have the PoW or PoS coin generation scheme like they do, which ultimately takes away a lot of it’s “digital gold” argument.
Really we don’t see Ripple/XRP becoming something great, and thus we don’t think it’s a good investment at all. The Ripple Foundation owns the vast majority of coins and has ample funds, and in our opinion the only reason Ripple has such a high marketcap is due to the coins ownership being so hyper-centralized that there isn’t really enough independent people capable of selling.
Our Outlook: Do We Invest in XRP/Ripple?
Absolutely not, and in fact we’d group it in the category of a “shitcoin” because it has no real fundamental support in our opinion when it comes to the price, and there’s really no path forward for Ripple that would make it a good investment.
Fundamentally the only way Ripple becomes a good investment is if Banks stay around, we continue to live in a Fiat world, and cryptocurrency as a whole fails — which in our opinion is not only essentially impossible at this stage, but if this occurs investment in the XRP cryptocurrency would implode due to negative sentiment in the space, and like we mentioned earlier in the previous section, there’s no guarantee whatsoever banks would need to use XRP it’s self rather than the under-layer of the Ripple protocol and even if they did it’d only be used as a settlement layer, which means upside is extremely limited.
We can’t see a reason someone would genuinely prefer to own XRP over other coins like Ethereum or Bitcoin, or some other altcoins like KyberNetwork or Monero. If you disagree with our analysis or have questions, feel free to contact us about that.