5 Ways To Invest In Ripple In 2021
Ripple can be termed as a centralised cryptocurrency that is mined, managed, and administered by Ripple Labs, its founding organisation. It’s a technology that functions both as a digital payment network and a cryptocurrency, for the easy processing of financial transactions across the world. As it apparently veers away from the core fundamentals of cryptocurrencies as such, it’s considered an odd entity in the crypto world.
At the time of writing this piece, the XRP price (the native token of Ripple) is valued at $1.33, with a total market cap of around $58.3 billion. Considering its strong fundamentals and the possibility of being actively used by various financial institutions as a viable alternative to the SWIFT network, XRP could be an excellent investment choice for interested people. In this article we will acquaint you with 5 different ways you can invest in Ripple, to potentially profit from the activity.
1. Trade Ripple
Trading Ripple through a cryptocurrency broker is one of the most common ways to start investing in XRP. These brokerage platforms allow you to speculate on XRP’s price movements through financial derivatives like Contracts for Difference (CFDs), Options, and Futures.
What sets such trading activity apart is the fact that you can exploit XRP’s price volatility without the need of owning and storing the digital currency. There’s no need of buying or managing any type of cryptocurrency wallet, as there’s no actual XRP token ownership involved.
This form of Ripple investment is ideal for people who are good at short-term trading and know how to make good use of analytical tools to make well-informed and timely investment decisions. The idea is to generate a secondary income based on one’s knowledge of the cryptocurrency markets. Hence, if you’re just starting out in the crypto trading world, you must first learn the ropes before making any large investments.
Where to trade Ripple
In order to trade Ripple using any of the derivative products mentioned above, you will need to first sign up with a reliable brokerage platform. As the best of these broker websites are regulated, you will need to comply with their KYC procedures when opening an account. Once all the verifications are complete, you will be able to take long or short positions on Ripple, based on your research and foresight. Verification may require you to upload a form of ID and proof of address.
As there are many brokers offering their services in the cryptocurrency market today, the best way to choose the right one for your needs is by comparing them based on multiple parameters like customer service, regulatory status, spreads, user-friendliness, security measures, and deposit & withdrawal options. Needless to say, this can be a very time-consuming affair. We’ve made things easier for you and have listed some of the most reliable cryptocurrency brokers operating on the Internet today. You can refer to them below.
2. Buy and HODL
The next most popular way to invest in Ripple is using the ‘Buy and HODL’ strategy. This strategy is essentially about buying XRP from a place of your choice and then holding onto your coins safely in a wallet for the long-term, hoping for XRP’s price to appreciate. HODL is actually a backronym of ‘Hold on for Dear Life’, that originated when a drunk Bitcoiner misspelled “hold” in an online rant.
In order to use this Ripple investment approach, you will need to first purchase Ripple from somewhere. Ideally, the best place to purchase Ripple is a reputed cryptocurrency exchange where you can buy it directly from sellers. Another alternative is to buy XRP from a broker that allows for the actual sale and purchase of cryptocurrencies, as well as speculative activities based on them. Please note, when you use this investment strategy, you’ll be actually owning XRP coins and will need to store them safely in a software or hardware wallet.
The boom witnessed in the cryptocurrency industry over the past decade has led to the emergence of various broker platforms throughout the world. A great multitude of crypto exchanges has sprung up too, facilitating the easy purchase and sale of crypto assets. To make buying and holding XRP easier for you, we have created dedicated pages on our website where we detail the most effective ways to buy Ripple. You can find the links to these pages below. However, please keep in mind that some of the payment options may or may not be available in your country. There may be transaction costs involved as well.
3. Invest in Cryptocurrency and Blockchain Companies
Although a lesser-known method of investing in Ripple, or at least one which isn’t used as commonly as others, is investing into a Ripple or blockchain-based start-up project. Doing so can be a very viable means of profiting from Ripple in the long term. More and more entrepreneurs are taking an interest in cryptocurrencies today, filling the space with various innovative ideas. Such ideas normally manifest themselves as brand-new companies aiming to revolutionise the crypto scene in their own unique ways.
While Ripple is a centralised cryptocurrency, with its creators primarily dictating the rules of the game, if a start-up comes along and makes good use of Ripple in some way, you could benefit immensely by investing in that company at the right time. On the other hand, investing in the stock of some blockchain-based business can also be an excellent means of banking upon the crypto revolution in general. In that case, you stand to benefit both from the company’s performance as well as the general mood of the crypto markets.
Where to invest in Ripple shares
A cryptocurrency broker website can allow you to use derivative products and open long or short positions on the stock of a specific Ripple or blockchain-based company. Thereafter, you can profit from the trade depending upon which way you expect the market to move. If you’re bullish on the blockchain tech and crypto market, you’ll go long on that stock; otherwise, you’ll take a short position. The idea is to indirectly profit from Ripple or blockchain tech, without directly owning any cryptocurrency.
Please note, it’s important that you use the right broker platform for such trades. This can be accomplished by assessing multiple factors like regulatory compliance, availability of trading charts and data, payment methods, user-friendliness, and fee structures to compare different broker services. It is understandable that all of this can be very challenging for anyone who is just starting out in the trading world. For all such individuals, and everyone else in general, we have carried out a detailed comparative analysis of the most reputed broker platforms on the Internet, and have shortlisted the best below.
4. Become a Miner/Staker
Staking or mining are considered two of the most commonly used ways of organically acquiring a cryptocurrency. Mining is about setting up an efficient and feasible technological infrastructure to be able to verify a cryptocurrency’s blockchain transactions and earn its coins as a reward. This applies to ‘Proof of Work’ blockchains. Staking, on the other hand, is mainly about having enough crypto coins which can be staked for a certain time period to earn the right to carry out transaction validations for a ‘Proof of Stake’ cryptocurrency network.
It’s important to note that Ripple network uses neither a ‘Proof of Stake’ system like Ethereum nor a ‘Proof of Work’ system like Bitcoin. There is no way you can mine XRP coins, as the system doesn’t depend upon blockchain technology for its transaction validations. They have created and patented a technology called Ripple Protocol Consensus Algorithm (RPCA), making it mandatory for all the nodes on the network to unanimously agree, to validate a transaction. The Ripple Ledger is maintained by many independent participants constituting the ‘XRP Community’, and transaction validations take no more than 5 seconds. Anyone can become a validator and nowadays it is mainly exchanges, universities, and even some financial institutions who do this job.
Hence, it can be safely stated that you cannot use the mining or staking approach to acquire XRP coins.
Where to store Ripple
Despite the fact that you can’t mine or stake XRP, you’ll nevertheless require a safe place to store your XRP coins, however you obtain them. Hardware and software wallets are two of the most popular choices for this purpose. Hardware wallets are physical devices, usually the size of flash drives, which can easily store your XRP keys and keep them safe from any kind of hacking attempt. Software wallets are usually in the form of desktop applications, mobile apps or online services, which can make your XRP coins readily available for any online or offline transactions. Below we have provided a list of some recommended wallets you can use to store your XRP coins.
5. Become a Ripple Developer to Make Money
This one is another indirect way of acquiring Ripple. It works by creating applications and solutions that easily integrate the Ripple technology, to facilitate sending and receiving of payments across any geography, network and currency. You can choose to become a RippleX developer and easily create such services, tools and programs on the XRP Ledger. RippleX is an open developer platform that makes it easy for entrepreneurs and developers to eliminate the pain associated with integrating blockchain technologies into applications.
It’s worth mentioning that the average salary commanded by such blockchain developers falls in the bracket of $150,000 to $200,000, which is far higher than the average national salary in the US. However, please note in order to qualify for creating such applications or software, you’d need to at least be a software engineer, with a thorough knowledge of various programming languages such as C++, Java, Python, and others.
Expert Tip on When and How to Invest in Ripple“ To conclude, we’d like to state that we covered multiple ways of investing in Ripple in this article, starting with trading the cryptocurrency, buying and holding XRP, trading the stock of a Ripple or blockchain-based company and lastly, becoming a RippleX or blockchain developer. No matter which option you go with, you’d still need to learn cryptocurrency investment basics like studying the history of Ripple, understanding its price movements, and forecasting future developments to make the most of the investment activity. We’d like to emphasise that there is no right or wrong time to make a Ripple investment. It all boils down to the logic you use to base your investment decisions on, and the intensive research you’ve backed it up with. ”