Is Ripple A Good Investment ? - XRP Analysis & Price Prediction (2018)
Ripple is often confused with XRP and The Correct Question should be About XRP as an investment rather than considering, is ripple a good investment?
Well the Answer is - SURE it is !
But before we get to it, lets first clarify the difference between XRP and ripple. Well, Ripple is a payment company that specializes in Software and solutions for Cross-border Payments, Remittances, and Real-time Settlement. XRP is a digital asset which happens to be a cryptocurrency, that is used in one of their Products Xrapid.
XRP is one of the Few coins that has a real-world use case and is currently being used. Ripple has paying customers in form of top-notch banks, some of which also happen to be investors in XRP's development and success. This crypto is extensively used by banks and financial companies all over the world even today.
So What Is The Real World Problem ?
There are 2 Major Problems that Ripple is solving, XRP is involved in one of the solutions and plays an important part in the solution.
The Cross-border Payment system is extremely time-consuming and costly. usually, the Payer deposits his money with local bank or money transfer company, now this company could be a local company with mo bilateral ties with the cross-border foreign bank. So it takes the help of an intermediary bank, which charges a hefty fee, which is basically percolated to the payer. this intermediary bank will now take several hours to days to adjust its ledgers and then use its foreign branch for the settlement with the payee’s bank. More such intermediary banks more will be the friction (time delay as well as cost overheads for the transfer)
To settle the Overseas transfer, banks need to maintain Prefunded Nostro accounts with Intermediary banks / financial institutions. As per reports, The estimated value of such pre-funded accounts is close to 20 trillion USD (20,000,000,000,000 USD). This is a lot of capital which is basically kept dormant, which otherwise could have been used for productive purposes. Additionally, The Pre Funded accounts in Unstable economies like Syria, Iraq, Venezuela etc can have additional threat of rampant inflation which can erode the purchasing power of parked settlement funds. This is a liquidity problem that XRP tries to resolve.
Even if The banks try and create any kind of bilateral relations with foreign banks, On an average it can take anywhere from 6 to 9 months to do so. Hence it automatically becomes essential for them to go with already tied up Intermediary banks which have existing Bilateral relationship with Foreign local banks.
If you like Video Representation See our Video - Ripple XRP - Fundamental Analysis & Price Prediction or else continue reading
What Solution is Ripple providing? Different Ripple Products.
Ripple through its 2 products provide a solution for both Time lag, cost as well as the Liquidity issue.
1. XCurrent : This is The main product of ripple that is used to solve the time delay issue which at times can be as long as 3–4 days. It is also much more cost-effective than the SWIFT transfer being used today. Xcurrent Solution basically ensures that FIAT money (eg INR, USD, GBP etc) can be transferred on immediate basis resolving the time delays and cost involved in Cross-border transfers today. It is important to Note that Xcurrent Does not involve usage of XRP in any way. It is a proven Solution which is basically used by over 140 Banks and BFSI companies all over the world.
2. XRapid : While the XCurrent Software solves the Major problem of Timelapse and does reduce the cost considerably, It Still uses FIAT currency for settlement, which basically indicates that the Liquidity problem of Nostro Pre Funded accounts is still unsolved. This is where Xrapid comes in picture. It uses XRP as an Digital settlement asset , that helps in overcoming any kind of Intermediary Party as well as use of Pre Funded Nostro accounts. The Payer simply sends either FIAT currency or XRP to the Payer’s Bank, Which simply sends the XRP (or converts FIAT currency of Payer to XRP) and sends them to the Payee’s bank, which can be converted to respective Fiat currency by the Payee. Xrapid is gradually gaining ground and now 8 Organisations (including some of the big ones like SBI Holdings, Moneygram, TransUnion etc) are using it to reliably resolve the time lag as well as the cost and liquidity problem.
Ripple Xrp Price Prediction - Why Would Its Value Increase Over Time ?
Firstly Ripple owns 61% of the total XRP circulation (of 100,000,000,000 Hundred Billion) - Part compensation of Top management and Developers happens in terms of XRP - so they have all the vested interest to grow the value of XRP. They are already working with 140+ top banks with there XCurrent Solution, They have a great opportunity to convince them to use Xrapid instead.
Even if XRP is able to capture 10% of the Parked Prefunded Nostro account value in next 3–5 years , with the velocity and usage can increase the market cap form current (40+ billion) to around 2 Trillion which mean a close to 50X return on Investment in price ( around 50$) This is just rough estimate and calculated guess work which is concluded based on the facts presented above and not any kind of Price manipulation attempt, neither is this any kind of advice to buy XRP.
Important Note : Its very Important to understand that this is not an Investment advice, Please do your own Due Diligence before investing.
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