Ripple News Analysis
As Bitcoin prices cross $12,500—defying all rhyme or reason, I might add—it’s tempting for investors to shun other cryptocurrencies in favor of the market leader.
But that would be a tremendous mistake.
Many so-called “altcoins” have impressive-looking charts, some even more impressive than Bitcoin’s.
For example, IOTA gained more than 1,043% since we initiated coverage on October 25. It even broke past our IOTA price prediction for 2018.
That’s how much explosive potential there is across the cryptocurrency space.
But you can’t expect that potential to unfold at specific times. Investing doesn’t work that way. There are literally a thousand moving parts, and no one can keep track of them all. That’s why we advocate a sensible buy and hold investment strategy.
This brings us to Ripple.
With currencies exploding all around it, why is the XRP price stuck at $0.25?
Ripple Price Chart:
Why Are XRP Prices Not Moving?
I spoke to one investor who claims it is because XRP is a “scam.”
He said that its price is too easily manipulated by the management team, which can dump Ripple-the-company’s substantial holdings in order to balance the XRP price.
When I replied saying that Ripple had locked up those 55 billion tokens in an effort to forestall his exact criticisms, he said Ripple’s actions were “not a good thing.”
Of course, he later mentioned getting the sour end of an XRP trade, which throws his criticisms into a more awkward light.
But I’ve come across this skepticism before.
Investors are generally more suspicious of Ripple than of open blockchains (like Bitcoin). To them, the currency’s expansive supply and coziness with banks render it guilty. Guilty of what, no one knows.
Nonetheless, I think it’s important to address these concerns.
Possible Criticisms of Ripple
Criticism #1: The Supply of XRP Is Too High
Answer: Supply is only significant in its relation to demand. So it shouldn’t matter that there are 38.7 billion XRP tokens in circulation if institutional demand can eventually match that.
To be sure, Ripple’s clients are not currently using XRP to settle international transfers, but neither are ordinary people using Bitcoin to buy their lunch.
If you ask me which one is more likely to happen first, I’m leaning heavily toward XRP adoption.
Criticism #2: Ripple’s Corporate Structure Is Top-Down
Answer: Like most companies, Ripple has a chief executive and he is able to direct the firm’s resources and attention. If you think that’s a bad thing…well, okay. I disagree.
There is a lot of speculative money in the cryptocurrency space. It got there by investors putting money into technologies they did not understand, that largely do nothing. By contrast, Ripple has a clearly defined goal, a unique opportunity to carve out a niche in this market.
That matters more to me than ideological purity. Decentralization be damned if it gets in the way of making a profit. Try to remember that there’s more than one way to skin a cat.
Criticism #3: Ripple Wants to Keep Its Price Stable
Answer: I actually don’t think this is far from the truth. Ripple might eventually act as a lender of last resort, stepping in whenever XRP strays from the mean. But that time is not now.
As I said earlier, Ripple tied up 55 billion of XRP to assure investors of that. Both the currency and the company are in scaling mode. No one (at least on this web site) is claiming that XRP will reach $1,000, but what about $2.00?
That would only raise the currency’s market capitalization to $77.5 billion. We believe that level is certainly within grasp, especially given the company’s strident expansion in India and Singapore.
We are aware of the big criticisms made against XRP, yet none of them dissuade us from making a $2.00 Ripple price prediction for 2018. Hold on.