Buying Ripple in 2018: Is it a good idea?

In our opinion, Ripple is not a bad investment, but it is definitely not the best in the sector. We think it all depends on a few factors whether or not Ripple will be worth buying in 2018. In the extreme short term, meaning over the next few weeks or months, we can see Ripple going from its current price of around 48 cents to a price of around $1. That does mean a potential return of 100%. That being said, Ripple gaining much more than that is questionable as the overall crypto community does not fully accept it, and the Ripple network and coin are two completely different things that should be looked at as separate products.

Why Ripple

Let’s start with the pros and why we think a quick flip through Ripple is very possible. Ripple is currently trading around 15% of its all-time high and is down considerably in comparison to the overall market. Through the correction, it did suffer bigger losses than most other currencies sector-wide. This has left Ripple over-corrected, in our opinion, and will likely return to settle somewhere in the low dollar range. Considering its present price point and slow recovery, it likely will recover over the short term to the above-mentioned price point.

Additionally, Ripple has announced some major partnerships with about 50+ banks and financial sector players. Its latest partnership with Western Union could potentially be a game changer and see the coin do even better than we’re predicting.

Why Not Ripple

Now for the reasons we don’t think Ripple will be a longer-term big earner. Unlike other cryptocurrencies that focus on a decentralized model, Ripple is very centralized and its network and coin are owned solely by one entity. This has led many crypto-proponents to argue that it is not a true cryptocurrency, but rather a centralized asset that fits more into the conventional model. Another major issue is that the Ripple network and Ripple coin are not the same things and if a bank chooses to use the network, but not the coin, it could spell disaster for Ripple owners.

Also, Ripple is very expensive in comparison to other cryptocurrencies. Currently, it is the third largest by market capitalization and though it is attempting to penetrate a multi-trillion-dollar industry (International financial settlements), it still is in its early stages and no one knows how well received it will be.

Ripple Does Have a Chance

That being said, if Ripple does manage to capture even 1% of the $27 trillion-dollar market it is after, it could see its value soar. That is questionable, as most major financial institutions are a rather old school and will be slow to adopt the technology and crypto philosophy. With Ripple being headquartered in the US, it is also prone to heavy regulations which could adversely affect its potential. Recently, the SEC classified it as a security which will definitely make it much harder to sell to those looking for true cryptos.

Think Short-Term, Not Long-Term

If you are planning to buy Ripple, we think as a short-term position it is a good buy; as a longer-term investment it should not make up to big a part of your portfolio. That is just an opinion and we think using an index strategy may be useful in hedging against incoming sector regulations, as Ripple does follow stricter protocols similar to banks or the conventional sector. Also, as the banks will undoubtedly enter the sector at some point, Ripple has the potential to be an entry point for institutional money into the sector, which is definitely a plus point.

All in all, we think actively trading Ripple in the short and mid-term can prove profitable. However, longer-term holdings should only he made as a hedge against the above-mentioned factors. Trading is not for everyone and, unless you have financial market experience or understand the market theory, you should avoid doing it yourself especially without having access to the market data and information required to stay on top of those investments.  

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