Is Ripple (XRP) a Millionaire Maker?

Cryptocurrencies, especially altcoins such as: ripple (XRP 1.24%)Also known as XRP, it is one of the riskiest assets to invest in. Ripple has been particularly troubled by years of litigation between its creator and the SEC, and this saga is finally coming to an end. The price of the XRP coin has risen significantly since the court’s ruling earlier this summer, but the price is still well below its all-time highs.

So what are the long-term benefits for Ripple with these lawsuits taking the lion’s share?

Does Ripple have what it takes to make it? Bitcoin– Could it be a life-changing asset for those looking to hold on to it for the long term?

Here’s what you need to know:

What is Ripple (XRP) used for?

Ripple has real potential in the modern economy. Ripple Labs created the Ripple blockchain as a payment network for cross-border transactions. No matter how great the technology is in 2024, cross-border transactions are still somewhat cumbersome. They are slow, expensive, involve numerous fees, and can take up to four business days to clear.

Transactions made on Ripple are converted from one currency to Ripple’s cryptocurrency token, XRP, which is then converted to another currency on the other side of the transaction. Let’s say you’re in the US and want to send money to someone in Japan. The dollar-denominated payment is converted to XRP on the Ripple network, and that XRP is then converted to Japanese yen on the other side.

Fees can add anywhere from $15 to $45 to each cross-border payment, but Ripple transaction costs are on average a fraction of a penny. Plus, Ripple can settle transactions in seconds, not days.

Knowing About Competition

Like many cryptocurrencies, supply and demand determine the long-term price of XRP. The good news is that Ripple has capped the supply of XRP at 100 billion tokens. On the demand side, Ripple’s adoption ultimately determines its success and the investment potential of XRP. Ripple competes with a powerful organization called the Society for Worldwide Interbank Financial Telecommunications (SWIFT), a cooperative financial messaging system that facilitates cross-border transactions worldwide.

SWIFT benefits from network effects. It is a competitive entrenchment that makes SWIFT powerful because it is used by many institutions. Around 11,000 financial institutions worldwide use SWIFT to send more than 44 million remittance messages every day. The million-dollar question is whether Ripple can meaningfully erode this dominance.

Is Ripple a Millionaire-Creating Company?

As mentioned earlier, Ripple is still trading well below its all-time highs even after a generally favorable outcome in its legal battle with the SEC.

XRP price data from YCharts

Ripple has had a nice run, but the more banks use Ripple, the higher its price will ultimately be. The lawsuit results will help remove the dark cloud that has prevented financial institutions from using Ripple for cross-border transactions as intended. Now, Ripple is likely to see increased usage and its price will likely go up. However, investors may need to be patient. It is not yet completely over, as the SEC is likely to appeal the ruling.

Looking at the big picture, there is a push to adopt Ripple as many large banks are already using it.

But is Ripple a life-changing investment opportunity?

It’s hard to say. Even if Ripple soars to all-time highs, it won’t be able to generate the massive returns, perhaps thousands of percentage points, needed to turn a modest investment into a million dollars. On the other hand, Ripple is still a speculative asset, so it wouldn’t be wise to invest huge amounts of money either. That leaves investors somewhere in the middle. Sure, if things go well, it could be a profitable investment, but calling it a million-dollar opportunity seems overdone at this point. It’s better to do it as a small part of a diversified portfolio.