As of October 2018, Ripple is in a good mood, and it seems the cryptocurrency and the project as a whole is here to stay. In the recent weeks, XRP has even tried to outstrip Ethereum and consolidate its position as the second largest cryptocurrency by market cap. However, the coin has lost some strength and moved back to the third place, though it looks solid anyway.
In fact, don’t expect Ripple to become dead in the coming years. Why? It’s because, unlike other decentralized cryptocurrencies out there, this one is operated by a single company (called Ripple, as you may guess). This company manages a huge consortium, called RippleNet, which comprises big banks, financial firms, and other companies. Think about UBS, UniCredit Group, National Bank of Abu Dhabi, Accenture or American Express. There is no way a company with so many deals, partnerships, and projects can vanish away just so. As soon as Ripple is involved with its projects, trials, and payment infrastructure, XRP will continue to exist.
Note that I don’t want to state that the lack of true decentralization is a good thing. I’m just explaining that Ripple is a company like any other one, and it is doing quite well.
Ripple has several products to offer to its partners, such as xCurrent or xRapid – two technologies that allow cross-border transactions and other functions. If the former one doesn’t involve operations with XRP as it leverages Ripple’s blockchain technology only (which is still questionable whether it is blockchain indeed), then xRapid is a new technology that revolves around XRP as an intermediary currency between two type of assets that has to be converted. The solution went live at the beginning of October 2018, with three companies already using it – Cuallix, Mercury FX, and Catalyst Corporate Federal Credit Union. Soon, more companies from the RippleNet ecosystem will start using xRapid, which suggests the demand for XRP will increase.
The launch of xRapid got a lot of attention, being one of the key drivers behind XRP’s recent bullish movement when it exceeded Ethereum for a short period.
The principle behind xRapid is to accelerate cross-border transactions between different fiat currencies. For example, it would be easy to send the value of US dollars in Japan. The sender will simply input USD into the system, which will convert the amount to XRP, which is always the intermediary coin. At the other end, the XRP will be converted to Yen so the transactions will be successfully executed. The process is fast, which is why XRP’s fluctuations cannot affect the transaction.
How xRapid works
XRP is currently trading at $0.46. It’s way below its record high from January 2018, at over $3.30, but at least it’s a fair price that is backed by value rather than speculation. Ripple is now trading at approximately the same level that it was trading in April or July of this year.
It is clear that XRP is not dead, but is it a good investment? I wouldn’t say so. Even if many investors expect xRapid to support XRP’s demand in the coming months (as more companies join the system), XRP is quite unstable and sensitive to any news, both positive and negative. Ripple cannot double or triple in price overnight. I would not bet the entire stake on XRP, though including it in the investment portfolio might secure some return in the future… or at least preserve the value.