In the world of cryptocurrencies, there is a big shift in one particular coin — XRP. This Ripple’s cryptocurrency has surged dramatically upward. It is hitting its highest price in nearly six years. Hence, the investors are talking about it everywhere. I believe this is an important development in cryptocurrencies. But what’s driving this rise? What we should know about XRP before jumping in? Allow me to declutter XRP in way that’s easy to understand.
1. What is XRP?
XRP is a cryptocurrency that was created by Ripple Labs. It is like Bitcoin but with a difference.
- Cruptocurrencies like Bitcoin or Ethereum, are mostly used as digital currencies or investments.
- XRP was specifically built for fast, low-cost payments across borders.
Think of it as a digital solution for transferring money between countries — faster and cheaper than traditional methods.
Hence, Banks and financial institutions are interested in XRP technology because it can save them time and money when sending payments globally.
For my Indian readers, you can imagine XRP technology as something as India’s UPI technology. Both are used to enable low-cost fast money transfers. But XRP and UPI are not the same. Here are a few differences:
| Feature | UPI | Ripple’s XRP |
| Technology | Distributed Ledger Technology (not blockchain) | Blockchain Technology |
| Focus | Domestic Payments | International Payments |
| Currency | Indian Rupee | XRP Cryptocurrency |
| Network | Centralized Network of Banks and Payment Service Providers | Decentralized Network of Nodes [multiple computers (nodes) work together without a central authority, ensuring security and resilience]. |
2. The Big Surge: Why Is XRP Going Up?
XRP’s price has been going up for several reasons. We’ll discuss a few key ones here in this blog post.
This price surge has made XRP one of the hottest topics in the cryptocurrency market in December’24.
Here’s a quick breakdown of why, I think, XRP is gaining so much attention:
2.1 Ripple’s Legal Victory Over the SEC
One of the most significant drivers behind the XRP surge is Ripple’s partial victory against the U.S. Securities and Exchange Commission (SEC).
- Since 2020, Ripple has been battling the SEC. The SEC has accused XRP of being a security (like stocks) and claimed Ripple sold it without proper registration. As per law, this is not allowed in the US (more here).
- In August 2024, Ripple scored a major win in court when a judge ruled that XRP is not a security when traded on public exchanges. This ruling boosted investor confidence, as it removed a lot of legal uncertainty surrounding XRP’s future. This victory gave XRP a major boost, and people are optimistic about its future.
- In October 2024, SEC appealed against the above decision (read more) as it thinks that above court decision will limit their powers to practice cryptocurrency regulations.
2.2 Institutional Interest
XRP is increasingly being used by financial institutions for cross-border payments. Ripple has been working to position XRP as a payment solution for banks.
It is leading to a growing adoption of XRP technology by the institutions.
There’s also talk about a potential XRP Exchange-Traded Fund (ETF). This could make it easier for institutional investors to invest in XRP.
The fact that big players in the financial industry are showing interest in XRP is fuelling the current surge.
International banks using XRP for money transfers
Ripple has partnered with many financial institutions. Nevertheless, the direct use of XRP for international money transfers by major international banks is limited. However, some banks and financial institutions have integrated RippleNet to streamline cross-border payments. It can leverage XRP to facilitate certain transactions. But these transactions are not always a direct consumer-facing service (read more about ripply blockchain tech)
2.3 General Positive Sentiment in the Crypto Market
While the price of XRP has surged significantly, it’s not happening in isolation. The entire cryptocurrency market has been performing well recently.
Bitcoin, Dogecoin, Ether, etc have gained value in the last one month.
This positive environment has benefited XRP. As investors are more willing to put their money into cryptocurrencies right now, the XRP market is also getting the benefit of tailwinds.
2.4 Technical Factors and Trading Volume
From a technical perspective, XRP’s price has been climbing steadily. It has surpassed the key resistance levels.
The trading volume and the Relative Strength Index (RSI) — which shows whether a stock or cryptocurrency is overbought or oversold — are both bullish indicators.
In simple terms, XRP’s momentum is strong. The traders are feeling confident that XRP will continue to grow. Read more on technical analysis of XRP.
3. Why Should We Care About XRP’s Rise?
As an Indian investor, we might wonder why we should care about the surge in XRP’s price. After all, cryptocurrencies have been volatile, and the legal issues surrounding XRP might still scare off some people.
But here’s the thing — XRP’s growth is an indication of how the world of cryptocurrencies is evolving. It could open doors for new investment opportunities.
3.1 Potential for Future Growth
XRP is often seen as a stable player in the crypto space.
Its unique use case as a payment solution for financial institutions makes it different from many other cryptocurrencies.
If Ripple continues to secure more partnerships with banks and financial institutions, XRP could see even more growth in the long run.
3.2 Diversification in Our Investment Portfolio
We investors always looking to diversify our portfolios, both for risk mitigating and also for increasing the return potential.
Adding a cryptocurrency like XRP could provide a new level of growth potential.
However, we must keep it in mind that cryptocurrencies are still highly speculative, and their prices can be volatile.
We must approach cryptocurrencies cautiously. Only allocate a small portion of your portfolio to it. Cryptocurrencies should be alongside our traditional assets like stocks, mutual funds, ETF, bank deposits, etc.
3.3 Legal Clarity Is Key
The ongoing legal battle between Ripple and the SEC remains a significant factor.
While Ripple has scored a victory, the SEC is still appealing the decision. This means there’s a level of risk involved.
For long-term investors, monitoring how this case develops will be crucial. If Ripple continues to win in court, it could solidify XRP’s status as a major cryptocurrency.
4. What is the way to invest in XRP from India?
One can invest in XRP in India through various cryptocurrency exchanges like:
- CoinDCX: It offering a user-friendly platform to buy and sell XRP.
- WazirX: Is another Indian exchange that supports XRP trading.
- ZebPay: It is also a exchange in India that allows us to trade in XRP.
To invest in XRP, one needs to create an account on one of these exchanges. Complete the KYC verification process, and depositing funds is also required.
Once our account is verified, we can purchase XRP using Indian Rupees.
4.1 Will I Invest in XRP?
Beginners should take a cautious approach while investing in cryptocurrencies like Bitcoin or XRP.
While the current surge is exciting, cryptocurrencies remain speculative investments.
If I’ll decide to invest, I’ll make sure that it’s a very small portion of my overall portfolio. In the meantime, I will go on reading about XRP to build a more informed perspective about it.
I believe in the future of blockchain technology and the increasing adoption of digital payments. Hence, I’ve an inclination to include cryptos like XRP to my portfolio.
But because my awareness about XRP is less at the moment, I’ll delay my next steps.
Let me know what you think in the comments. Have you ever considered investing in XRP? Or do you think it’s too risky for your portfolio?
Have a happy investing.
