Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. You should be prepared to lose all the money you invest in cryptoassets.
The cryptoasset market is largely unregulated. There is a risk of losing money or any cryptoassets you purchase due to risks such as cyber-attacks, financial crime and firm failure.
2. You should not expect to be protected if something goes wrong
The Financial Services Compensation Scheme (FSCS) doesn't protect this type of investment because it's not a 'specified investment' under the UK regulatory regime – in other words, this type of investment isn't recognised as the sort of investment that the FSCS can protect. Learn more by using the FSCS investment protection checker.
The Financial Ombudsman Service (FOS) will not be able to consider complaints related to this firm or Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You may not be able to sell your investment when you want to
There is no guarantee that investments in cryptoassets can be easily sold at any given time. The ability to sell a cryptoasset depends on various factors, including the supply and demand in the market at that time.
Operational failings such as technology outages, cyber-attacks and comingling of funds could cause unwanted delay and you may be unable to sell your cryptoassets at the time you want.
4. Cryptoasset investments can be complex
Investments in cryptoassets can be complex, making it difficult to understand the risks associated with the investment.
You should do your own research before investing. If something sounds too good to be true, it probably is.
5. Don't put all your eggs in one basket
Putting all your money into a single type of investment is risky. Spreading your money across different investments makes you less dependent on any one to do well.
A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
If you are interested in learning more about how to protect yourself, visit the FCA's website here.
For further information about cryptoassets, visit the FCA's website here.
Finder's panel of fintech experts expects, on average, XRP will close 2023 at a price of 75 cents.
Looking further ahead, on average, our panel estimates XRP's value to hit $1.73 by the end of 2025 and $4.86 by 2030.
Let's take a closer look at the reasoning behind these predictions, as well as some of the opportunities and challenges ahead for XRP and Ripple.
XRP has been at the center of a closely watched legal battle between Ripple and the US Securities and Exchanges Commussion (SEC). Ripple is the creator of the XRP cryptocurrency and has been accused by the SEC of illegally selling XRP as an unregistered security.
The resulting effect on markets has been volatile, with the price of XRP shooting up by 73% in a single day in July 2023. XRP investors responded well to the news that Judge Analisa Torres, who is presiding over the case, deemed that XRP is not a security, in certain circumstances.
CEO of Unocoin Technologies Private Limited, Sathvik Vishwanath puts it simply, "If Brad Garlinghouse wins the case against the SEC then the price will shoot up. Major banks have also adopted the blockchain of Ripple."
Despite markets responding to a win for Ripple in July, the case is still ongoing, and XRP's future is still precarious.
John Iadeluca, CEO of Baz Capital says XRP "holds mainly speculative value" because it has "limited actual utility in the current Web3 and blockchain space."
Despite this, he understands the value of speculative hype and expects XRP to finish 2023 as high as $3.50, before eventually fading from relevancy by 2030 when he expects it to be worth 50 cents.
Similarly, Ruadhan O, founder of Seasonal Tokens, predicts that XRP will fall to 60 cents this year and notes that "Because it's not a smart-contract platform, Ripple can't easily integrate into the emerging global smart contract ecosystem."
So even if Ripple wins its case against the SEC, XRP may have a difficult path ahead as it diverges from the bulk of blockchain technology, which is smart contract-based.
Shubham Munde, senior research analyst at Market Research Future, predicts that XRP will finish the year around 55 cents before reaching $1.75 later in 2025 and $8.90 in 2030.
He says:
The prices of XRP would grow higher in the long term as Ripple's payment and exchange facilitating technology is supported by strong banks and financial institutions.
Is now the time to buy, sell, or hold XRP?
We polled our panel on 17 July when XRP was worth 74 cents, following the positive news from the SEC case which caused the coin to rally by 73% in a single day.
At these prices, 44% of our panel thinks now is the right time to sell XRP, with 39% thinking it is better to wait and hold. This may be related to the recent price surge which is often followed by a pullback. Only 17% think now is a good time to be buying XRP at these prices.
Are Ripple and XRP still significant in the crypto and remittance industries?
The price and success of XRP ultimately hinges on the success of Ripple. Ripple uses XRP as part of its remittance network which is designed to substantially reduce the costs of international payments, compared to legacy banking systems.
Ripple and XRP were both designed before the widespread adoption of stablecoins, which have found a home on several blockchain networks such as Ethereum as well as by banks and financial institutions.
We polled our panel on whether they thought Ripple and XRP still have any relevance in the cryptocurrency or remittance industries.
The results are nuanced.
27% of our panel outright said no, neither Ripple nor XRP has any relevance in either industry.
18% were unsure.
27% believe it's still relevant in both crypto and remittance industries, while 23% believe it's only relevant to the remittance industry.
Only 5% think it's relevant as a crypto only.
Ruadhan O provides a wonderfully detailed analysis of the opportunities and challenges that lie ahead for Ripple and XRP.
O acknowledges that Ripple is still relevant due to its regulation-friendly nature. However, this relevance may decline over time due to the increasing prevalence of tokenisation, Central Bank Digital Currencies and cross-chain token transfers:
"Within 5 years, it's very likely that Ripple will struggle to identify assets that can be more easily transferred from owner to owner using digital IOUs than using tokenised assets or cross-chain technology,"
"Because it's not a smart-contract platform, Ripple can't easily integrate into the emerging global smart contract ecosystem. XRP and the digital assets that Ripple can transfer are more likely to be tokenised and handled by smart contracts in the future than other digital assets are to be incorporated into Ripple. In the coming years, Ripple is likely to continue to be used by financial institutions, but as those institutions adopt smart contract technology, Ripple may need to innovate to avoid obsolescence."
Methodology
Finder surveyed 29 fintech specialists in July 2023. Panelists are able to answer as many or as few questions as they like, meaning the number of responses received varies by question. 14 panelists gave their price predictions for XRP by year-end 2023, and 14 panelists gave long-term predictions for 2025 and 13 for 2030. Panelists may own some cryptocurrencies, including XRP. All prices are listed in US$ per XRP.
Changes to methodology: In 2021, this research was conducted using the simple mean of all answers supplied to Finder. From 2022, we switched to using the truncated mean, with the top and bottom 10% of responses removed in order to attain a more consistent result. Any 2021 results quoted in this analysis have also been re-calculated using the truncated mean.
*Cryptocurrencies aren't regulated in the UK and there's no protection from the Financial Ombudsman or the Financial Services Compensation Scheme. Your capital is at risk. Capital gains tax on profits may apply.
Cryptocurrencies are speculative and investing in them involves significant risks - they're highly volatile, vulnerable to hacking and sensitive to secondary activity. The value of investments can fall as well as rise and you may get back less than you invested. Past performance is no guarantee of future results. This content shouldn't be interpreted as a recommendation to invest. Before you invest, you should get advice and decide whether the potential return outweighs the risks. Finder, or the author, may have holdings in the cryptocurrencies discussed.
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