XRP (CRYPTO:XRP) is inching ever closer to US$1. As of this writing, it was at US$0.86, down from US$0.90 earlier in the day. While XRP has been trending downward for the day, its trend for the year is positively bullish. Up 6.41% year to date, XRP is outperforming many other cryptocurrencies.
Why is that?
Mainly, it’s because the news from XRP and Ripple Labs has been very encouraging. As you’re about to see, there are a number of developments happening that bode well for XRP’s eventual adoption as a mainstream payment protocol. In the long run, that should drive demand for the XRP token and potentially lead to price appreciation.
Lawsuit going smoothly One thing that you might find surprising to hear mentioned as a positive for Ripple is the lawsuit that it’s embroiled in. Ripple is currently being sued by the SEC and is widely perceived to be winning. Among other things, Ripple has
- Found statements by SEC officials saying that cryptocurrencies aren’t securities;
- Won a number of procedural victories; and
- Had former SEC-affiliated lawyers say that its case has merit.
Banks adopting Ripple’s network A second major thing Ripple has going for it this year is the fact that banks around the world are adopting its payment network. So far this year, we have seen Canadian Imperial Bank of Commerce and banks in Israel and Australia adopt Ripple for cross-border payments. Touting the blockchain’s great speed, they say it will help them send transfers worldwide quickly. The RippleNet blockchain handles fiat transactions, but it uses XRP to source liquidity. So, it’s possible that the Ripple payment network will drive more demand for XRP, as it gets more widely adopted.
Foolish takeaway 2022 has been an incredible year for XRP and Ripple Labs. XRP’s price is soaring compared to other cryptocurrencies, and Ripple Labs is getting a million dollars’ worth of free press. It seems like a good time to be an XRP holder.
Does that mean that you should run out and buy XRP?
Perhaps not. Every investment entails risk, and cryptocurrency is riskier than most other asset classes. You should never buy any crypto without doing extensive due diligence first. With that said, it is definitely encouraging that XRP is seeing so much adoption from mainstream financial institutions. It means that there is demand for XRP that goes beyond the fickle buying and selling of speculators. If any of the big cryptocurrencies can become the “token of choice” for big banks, then it will likely enjoy very stable demand over the long term. Ripple, with its popular payment network, stands a good chance of becoming that cryptocurrency.
The post Ripple Could Re-Test $1! appeared first on The Motley Fool Canada.
Fool contributor Andrew Button has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.