Updated August 6, 2022

How to Invest in Ripple XRP

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Wondering if it's still a good idea to buy XRP? You might be surprised by its potential. Discover the 4 reasons to buy XRP and which exchanges still offer it.

One cryptocurrency that's currently flying under the radar is XRP, the native coin of Ripple.

In fact, most coverage of XRP has been negative, due to its SEC lawsuit

This lawsuit has added a degree of risk to XRP. But it may also be a unique investment opportunity.

Before you decide whether to invest in XRP, review the facts. Let's examine what XRP is, why you may want to invest in it, and whether it's worth the extra risk. Finally, we'll reveal how to invest in XRP and how to store it.

What is Ripple (XRP)?

Ripple and XRP are often used interchangeably, but they have important differences.

Ripple is the company that created the cryptocurrency XRP. It was launched in 2012.

Unlike Bitcoin or Litecoin, XRP is a payment protocol created with the intention of streamlining international payments.

Ripple's goal was to create a more inclusive financial infrastructure and accelerate the "Internet of Value" (or IoV). They believe the Internet of Value marks a new era in global finance, wherein money will be able to move as seamlessly as information does today.

XRP and RippleNet (Ripple's payment network) facilitate this seamless transfer of money.

Why Invest in Ripple (XRP)?

So why would an investor choose to invest in XRP? Here are four bullish factors of XRP to consider:

  1. Widespread Adoption & Commercial Use Cases
    While Bitcoin is finally seeing adoption as a store of value, XRP has a very different goal: simplifying cross-border payments, and making them 100% secure, instant, and as inexpensive as possible.

    XRP's parent company Ripple already has an impressive track record supporting its utility in the mainstream financial world.

    Partnerships with American Express and Santander signal that XRP could soon be utilized to speed up cross-border payments. As noted on their website: "Ripple is the only enterprise blockchain company today with products in commercial use by hundreds of customers across 55+ countries."

  2. Excellent Management & Promising Vision
    When analyzing any investment, it's important to look at the underlying management, team, and culture.

    Unlike other players in the crypto space, Ripple has shown that they're willing to compromise and work with regulators, which might make all the difference in the long run.[1]

    This demonstrates that the company has a long-term vision for the future of their technology. Plus, the fact that Ripple is willing to collaborate with regulators and the existing financial system makes them more likely to stand the test of time.

  3. A Key Player in the CBDC Space
    There is a big opportunity in the world of cryptocurrencies for CBDCs, or Central Bank Digital Currencies.[2]

    This concept is still in its infancy, but CBDCs would essentially allow governments to tokenize their native currency using the blockchain. The U.S. government, for example, could create a "digital dollar."

    Ripple is currently piloting a private digital ledger to help central banks accomplish this. Their CBDC Private Ledger is based on the same blockchain technology that powers Ripple's XRP Ledger (XRPL).

    This project alone demonstrates Ripple's ability to innovate and execute. It also highlights once again that the company is willing to collaborate and partner with regulators and governments.

  4. "Be Greedy When Others Are Fearful"
    You may have heard Warren Buffett's famous quote: "Be fearful when others are greedy, and greedy when others are fearful."

    Right now, Ripple is a contrarian investment in the cryptocurrency space. Much of the spotlight has focused on Bitcoin and Ethereum, and if Ripple has gotten any news at all, it's been negative press about their lawsuit with the SEC.

    For investors with a strong conviction in XRP, this has created an opportunity. The fear of government regulation may have put a major anchor on XRP's price, while other coins have skyrocketed.

    However, many think that XRP will recover from the SEC case, and recent trends in price have backed this theory up. Buying low might pay off later as Ripple continues to build strong bonds in the banking world.

Interested in buying XRP? Find out how U.S. traders can buy the asset in the section below, plus where to store it.

How to Invest in Ripple (XRP)

When the SEC announced their lawsuit against Ripple, XRP was removed from several major cryptocurrency exchanges in the U.S., including Coinbase.

For those who are in the United States, there are a few popular exchanges where you can still buy XRP. Here's how:

Crypto.com
XRP is still available for direct purchase on Crypto.com, and you can buy it in just four easy steps.

  1. Sign up for an Exchange account on their website
  2. Verify your account by clicking 'Connect to Exchange' in the email they send to you
  3. Deposit fiat or cryptocurrency to fund your account
  4. Visit the XRP page and click 'Buy XRP'

eToro
XRP is available for purchase on eToro, a popular exchange for it's focus on social trading.

  1. Sign up for an account on their website
  2. Verify your account with a valid U.S. passport, driver's license, or state ID
  3. Fund your account (For US clients, the minimum deposit is $10[3] and $200 if you're using CopyTrader)
  4. Visit the XRP page and click 'Trade'

Read more: eToro Review

Binance
Buy XRP on Binance, currently the biggest exchange on the market (in volume) and known for its low fees.

  1. Sign up for an account on Binance's website or app (Download: App Store, Google Play)
  2. Follow the instructions in their confirmation email to confirm your account
  3. Visit XRP's page and click 'Buy'

After you've purchased your XRP, you'll want to make sure it's stored securely. Review your best options in the section below.

What Does It Cost to Buy Ripple?

When you buy Ripple, it's important to keep in mind that you aren't just paying the price of the coin itself. You also have to consider fees.

Here are some common fees you might encounter when buying Ripple.

  • Transaction Fees: These are often charged by the exchange to cover the cost of trading.

  • Spread: This is the difference between the sell and buy price, often used by "commission-free" exchanges as a way of profiting from a transaction without disclosing it. Some exchanges charge it on both buy and sell transactions, others only once. This cost is sometimes hidden, and may be unlisted by the exchange.

  • Deposit Fees: Typically exchanges offer a variety of deposit methods. Sometimes they're free, others may be extremely expensive. Common deposit methods include ACH Bank Transfer and Wire Transfer.

  • Debit / Credit Purchase Fee: Many exchanges charge more for these purchase methods than others.

  • Withdrawal Fees: Any exchanges charge you for withdrawals. Prices often vary depending on withdrawal method.

  • Inactivity or Maintenance Fees: These are fairly uncommon on exchanges. Charged for having an account, or having but not using one, usually for 12 months.

  • Gas Fees: These are also fairly uncommon on exchanges. Charged to pay for the cost of executing an operation on the Blockchain.

Remember, these fees vary by exchange.

Where to Store XRP Safely

After you invest in XRP, it's time to decide where to store it. You can either leave it on the exchange or decide to move it to a wallet.

A general rule of thumb: Storing crypto in exchanges is more liquid but less secure.

  • If you're looking to make a short-term buy and trade, you might choose to simply leave your cryptocurrency on an exchange.

  • If you want more security or plan to store it long-term, it's best to store your XRP on a wallet.

Several popular wallets support XRP, including Atomic Wallet and Exodus Wallet.

Those who want maximum security often choose to store their XRP on an external, cold storage wallet like the Ledger Nano S or X.

Is Ripple (XRP) Worth the Risk?

Every crypto investment carries some degree of risk, and Ripple (XRP) is no exception. In this case, a lot of controversy revolves around the SEC's recent lawsuit against Ripple.

The SEC argues that XRP is a security, and that it therefore should have been registered with the SEC before being listed for investment.

Ripple, however, maintains that XRP is not a security, and is technically a cryptocurrency, like Bitcoin, and thus would not have to be registered as an investment contract.

It's a rather simple argument at its core, but no one can say with 100% certainty how the lawsuit will play out.

XRP bears argue that XRP could be banned in the United States. XRP bulls, on the other hand, argue that XRP's widespread adoption and large market cap show that the fears may be overblown. It's continued to be widely used even throughout the lawsuit.

At the time of writing, between April 1st and April 14th, 2021, XRP's price skyrocketed from less than 58 cents to just under $2.00 per token, making it clear that big gains are still to be had in XRP, even during the lawsuit.

However, risk-averse investors may still want to see how the lawsuit plays out before making a big bet on XRP.

Bottom Line

XRP is a unique cryptocurrency with a great management team, widespread adoption, and strong use cases. However, it's important to consider the risks of any investment. Ripple's current lawsuit with the SEC has scared off many investors.

This has certainly increased the degree of risk, but perhaps also the degree of possible returns. Savvy investors must do their due diligence and decide if XRP meets their own personal risk-reward profile.

References

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