Ripple (XRP) price prediction 2021

Sending international money transfers using bank wire transfers is an expensive and time-consuming experience. Ripple, which uses XRP, offers fast transactions and negligible fees, providing key advantages over existing transfer methods.

According to the World Bank, global remittance payments are expected to grow by 3.4% to roughly US$466 billion in 2018. Therefore, there’s a large market for Ripple to potentially tap into.

Ripple uses XRP to facilitate international money transfers by acting as a settlement layer. Essentially, it lets people make international money transfers much faster and with minimal fees. It’s been picked up by a range of banks and international organisations, and it is mostly designed to facilitate transfers in a business setting. Individuals will likely be using Ripple indirectly through their banks and indirectly benefiting with faster transfers and lower fees.

To help increase the adoption of XRP as a medium of exchange, Ripple has made several strategic acquisitions including money transfer platforms. The most notable of which was a US$50 million stake investment in MoneyGram, which they have since sold-off a third of.. Other businesses Ripple is invested in include crypto trading firm Algrim and the Logos Network.

These corporate partnerships and a commitment to bringing cryptocurrency to the business world, not to mention XRP’s widespread availability on exchanges, increase Ripple’s credibility in the eyes of the public. This could, in turn, increase demand.

Despite a total supply of 100 billion coins, the Ripple company has put 55 billion XRP in escrow. These are held in place by a smart contract which releases 1 billion XRP per month over 55 months. Any unused amount will be put to the back of the queue, for release in month 56, 57 and so on. The XRP tokens are released to Ripple partners and other affiliates in an effort to help get them involved as well as to let them test drive XRP and to start using it with low costs. So rather than going to the exchanges, the goal for the newly released XRP is to help grow its use.

The XRP ledger is more than just a transferable store of value. It also aims to offer smart contract functionality in an effort to increase its applications considerably. Institutions will be able to use XRP for a range of different purposes.

Ripple has announced partnerships with a long list of financial institutions that are testing its technology. However, until the platform can achieve widespread adoption with a wide range of banks, there will continue to be uncertainty around its value in the future.

Cryptocurrencies are still in their infancy and the legislative environment around the world remains unclear, so the adoption of cryptocurrency by major financial institutions could be slowed by regulatory challenges.

In December 2020 the SEC lodged a lawsuit against Ripple, accusing the company of using the XRP token as an illegal security to raise funds. This is the most recent step in long-fought PR (and now legal) battle by Ripple to prove that XRP is not a security, and not directly controlled by Ripple who maintain it is a decentralised ledger. Following the SEC news the value of XRP dropped by over 50% in a single week, which suggests the outcome of the lawsuit may have an effect on the future value on XRP.

In order to use Ripple payment technology, banks don’t actually have to use the XRP token. So even if Ripple’s technology is widely adopted, that doesn’t necessarily mean the price of XRP will rise accordingly.

With XRP’s large supply and currently limited use, traders will want to be wary of readjustments following price rises. This is especially true for a coin like XRP that benefits from stable pricing and is designed more for corporate use than individual use.

Banks use Ripple to conduct international transfers on behalf of individuals, but you need to be aware of the continued shift towards direct peer-to-peer systems and whether this could cut Ripple and the banks out of the equation. This is where Stellar Lumens come in. Lumens are also designed to facilitate international money transfers, but the main difference is that Stellar is designed for individuals to make international money transfers, or currency exchanges, directly with each other peer-to-peer. Essentially, it lets people exchange currencies and send money overseas by trading directly and automatically with each other, and cutting banks out of the equation. You’ll need to decide if this will be a problem for Ripple and XRP in the long run. You can also check out other potential competitors to Ripple further down this page.

Decentralisation, privacy and anonymity are a key focus for many cryptocurrencies, so Ripple’s decision to market itself to banks and major financial institutions has been criticised by some commentators.

Following the announcement by the SEC that they had opened a lawsuit against Ripple, a wave of exchanges delisted or halted trading on XRP. This high-volume exchanges such as Coinbase, Binance, Bitstamp, Crypto.com and Bittrex as well as funds Galaxy Digital, OSL and removal from the Bitwise 10 index.

With the total supply of XRP set at 100 billion, it’s worth considering the effect this will have on the supply/demand equation and how it influences price.