Bitcoin vs XRP: Which Crypto To Invest In 2020?
XRP dynamics are dictated by Ripple’s actions
The popularity of startup technical solutions will support the growth of the coin
The first half of 2020 turned out to be unprofitable for XRP holders
International consortium of news organizations developing transparency standards.
XRP is the cryptocurrency of California-based fintech startup Ripple, which is used by many traditional financial companies. The coin is in the top 5 most capitalized assets, which makes it attract the attention of investors. Despite the high position in the rating, many experts and popular members of the crypto community see the risks associated with investing in XRP.
To understand this issue, the editorial staff of BeInCrypto collected expert opinions on this coin..
EXANTE analyst Viktor Argonov shared his vision of the coin’s prospects with BeInCrypto’s editors. In his opinion, compared to Bitcoin (BTC) and Ethereum (ETH), the picture for XRP looks less optimistic..
“Since 2019, there have been persecutions of private corporations’ crypto projects in the world. Libra projects actually stoppedIn June 2019, Facebook announced preparations for the release of the Libra digital currency. The social networking project immediately caught the eye … More and TON, lawsuits were brought against USDT and XRP itself, issued by Ripple Inc. Investor interest is shifting towards decentralized projects that are not tied to corporations. XRP has dropped 8% since the start of the year, while its decentralized counterpart XLM has gained 41% – even more than BTC and ETH. XRP is regularly surrounded by scandals, although there is some positive news against this background. For example, the other day SBI Holdings made an announcement of a crypto fund, where 50% of the capital will be in XRP coins, “the expert noted..
Viktor Argonov believes that today it is impossible to say with confidence whether XRP will be able to reverse the negative trend. At the same time, the analyst noted that according to the results of 2020, the coin is unlikely to increase above BTC or ETH. Investors in XRP, in his opinion, should also invest in XLM for diversification..
XRP chart. Data: CoinMarketCap
Recall that earlier the BeInCrypto editorial staff analyzed the growth of cryptocurrencies – participants in the top 10 capitalization rating – during 2020. It turned out that XRP investors, unlike the owners of most coins from the designated category, suffered losses.
What Analysts and Crypto Community Members Think of XRP
Opinions are divided on the prospects for cryptocurrency. Some are confident that investing in XRP can bring profit, others doubt the possibility of further growth in the value of the asset. Among the negative opinions about cryptocurrency and its prospects are the following:
- Researchers at Xrplorer.com believe that 40% of transactions on the XRP network are fraudulent. According to experts, as part of the initiative, cybercriminals lure users with promises to gain profit from the difference in cryptocurrency rates.
- Peter Brandt, a well-known trader who previously correctly predicted the 2018 Bitcoin correction, considers XRP to be a manipulative scam. The expert is confident that the Ripple cryptocurrency is not worthy of investment. At the same time, Peter Brandt advised the readers of his microblog to invest 10% of free funds in Bitcoin..
- XRP’s inflation rate is five times higher than other high-cap cryptocurrencies. This is the conclusion reached by Messari analyst Florent Moulin. Members of the crypto community believe that such indicators indicate a low level of potential income from investments in the Ripple cryptocurrency.
Many investors are also worried about the large amount of XRP in the hands of startup co-founder Jed McCaleb. According to TheCryptoAssociate, in April 2020 alone, the Ripple co-founder sold 54 million coins from his own holdings. In total, between 2014 and 2019, Jed McCaleb sold about 1 billion XRP.
Statistics on the volume of coins sold by Jack McCaleb and their value at the time of sale. Data: Whale Allert
Investors believe that throwing a large amount of XRP into the market negatively affects the value of the cryptocurrency and, accordingly, devalues their investments..
As a reminder, Ripple releases a portion of XRP from its deposit account every month. The project investors are confident that the policy chosen by the company will lead to the devaluation of the cryptocurrency.
Ripple’s partner MoneyGram is also accused of XRP sales. At the end of April 2020, information appeared in the media that the company sold cryptocurrency in the amount of $ 11.3 million. MoneyGram received funds from Ripple as incentive tranches. Representatives of the payment service, immediately after the XRP transfer, decided to sell the coins.
Ripple CEO Brad Garlinghouse, in turn, claims that the start-up’s cryptocurrency rate is subject to manipulation no more than Bitcoin..
Day 4 of #CryptoCrazy week on @firstmove – PART 2 with @Ripple CEO @bgarlinghouse here pic.twitter.com/V2CWJH0fx6
– Julia Chatterley (@jchatterleyCNN) September 12, 2019
According to analysts at eToro and The Tie, the negative impact of the actions of Ripple representatives on the position of the coin leads to a decrease in the number of startup supporters. Changes in the attitude of XRP investors towards cryptocurrency, including contributing to a decrease in asset capitalization.
Comparison of XRP capitalization with Bitcoin, Ethereum and Tether. Data: CoinMarketCap
Read also: XRP hodlers doubt the future of ripple
In favor of XRP growth:
- Former Chairman of the CFTC Christopher Giancarlo believes that token As the use of cryptocurrencies grows, new types of tokens are emerging. They can represent value or something intangible like voices. Two … More XRP has high value. He presented his point of view in an article for IFLR magazine. According to the expert, XRP is not a security. The expert drew attention to the adoption by the business environment of Ripple technical solutions, during which the startup token is growing in popularity as a tool for making payments and exchanging assets.
- XRP’s potential growth is also supported by the expansion of Ripple’s products that use the project’s cryptocurrency. For example, in mid-June 2020, the head of the international banking department of a startup, Marian Delatinne, spoke about the company’s work on the expansion of On-Demand Liquidity (ODL) in Brazil..
Ripple’s technical solution allows cross-border payments by converting assets to XRP. Let’s give an example of the advantages of ODL over classic banking instruments:
- Let’s say citizen N needs to send 5 thousand rubles from Russia to friend F in Brazil. If N goes to a classic bank, the financial institution in Brazil will need a supply of rubles in order to issue F the transfer. In addition, it will take time to process the operation. Also N will be asked to pay a transfer fee. After the recipient, if he needs local currency, must convert fiat. The transaction fee will also subtract part of the amount.
- An alternative to the classic translation is ODL. Rubles N are converted to XRP. The digital payment reaches its destination instantly. F receives the transfer and can convert XRP to the currency it needs. Most often, this is local fiat. The banks of the country where the addressee lives have its stocks. As a result: saving time and significantly reducing the cost of the operation due to work in digital format.
According to Brad Garlinghouse, the advantages of technical solutions of a startup over the tools of classical banks will allow the company to repeat the success of Amazon. He explained his point of view by the potential of XRP approval by the central banks of the countries.
Brad Garlinghouse’s assumptions are not unfounded. For example, in February 2020, the Central Bank of Egypt began using Ripple’s technical solutions. According to the World Bank, the country is among the top 5 recipients of transfers from abroad.
To the conclusions
Despite the fact that XRP is among the top 5 cryptocurrencies in terms of capitalization, many doubt the prospects for a positive movement in the coin’s rate. To other conclusions:
- XRP rate depends on the actions of Ripple representatives. In particular, the cost of the cryptocurrency is influenced by the release of new batches of coins into the market and the sale of savings by the co-founders of the startup..
- Despite criticism from Ripple, the startup’s tech solutions are in demand. In particular, the company’s developments are involved in large central banks. The growing popularity of technical solutions, within which it is necessary to use XRP, opens the potential for increasing the value of the coin.
- The cryptocurrency could realize the available growth potential, including during the first half of 2020. Despite this, analysis of XRP behavior showed that the Ripple coin brought losses to its investors in the first half of the year..
Recall that the decision to invest must be made independently. First, you need to analyze all points of view, as well as the pros and cons of investing in XRP.
All information contained on our website is published in good faith and objectivity, and for informational purposes only. The reader is solely responsible for any actions he takes based on the information received on our website..
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