Should You Buy XRP With $100 and Hold It Until 2024 and Beyond?

Like its digital asset peers, XRP (XRP 0.93%) has had a wild journey up to this point. The Ripple network's native token has had periods of monster price run-ups and dips in the past several years. But it currently trades 78% off its all-time high from January 2018.

Despite periods of extreme price volatility, XRP (XRP 0.93%) has largely underperformed its major digital asset peers over the last several years. But could buying XRP now and holding it for the long haul be a smart move? Let's take a closer look.

To put things into perspective, XRP is currently the world's seventh most valuable blockchain, with a market cap of just over $32 billion. But this pales in comparison to the market caps of crypto giants like Bitcoin and Ether, which stand at $1.2 trillion and $700 billion, respectively.

Now, back to the original question: Is it a good idea to buy XRP with $100 and hold it through 2024 and beyond?

Well, the answer largely depends on your individual risk tolerance and investment goals. Here are some key factors to consider.

Rippling through the financial services sector

If we're being honest, the vast majority of cryptocurrencies out there are completely useless, with many even being outright scams. And lawmakers are still trying to figure out how to regulate this rapidly evolving industry. But that doesn't stop people from creating new tokens all the time.

Now, I do believe that the market will eventually weed out the losers. And as a result, the long-term success of any cryptocurrency depends on it solving a problem in a way that a critical mass of people find useful. And this is where XRP actually stands out from the crowd.

The Ripple network's grand ambition is to make it incredibly fast (think seconds) and cheap (costing fractions of a penny) to send money across borders. Imagine this network, called RippleNet, as a bridge that connects two different fiat currencies. Someone could transfer their U.S. dollars into XRP tokens and send them across the blockchain to someone in India, who can then convert the crypto into their native currency, the rupee.

Hundreds of billions of dollars are sent as remittances each year. If using XRP facilitates a better experience for all stakeholders, then it can find greater adoption.

But this doesn't even include the money that larger parties, such as corporations, banks, and governments, send across borders. I'd suspect this market is easily in the tens of trillions of dollars annually. And it's clear that the XRP token is going after a massive opportunity.

Top risk factors

Now, let's shift gears and discuss some of the top risks that XRP faces.毕竟,加密货币世界危机四伏。

In recent years, the Ripple network has had to contend with regulatory uncertainty over XRP's status as a commodity or security. The Securities and Exchange Commission (SEC) ultimately ruled that the sale of tokens to professional investors violated rules, and the agency ordered Ripple to pay a fine of $125 million. This was significantly lower than the original request of $2 billion. Even with what looks like a victory, an appeal could happen, which could create headaches that drag on for years.

The financial services sector is also one of the largest and most powerful in the world. And to its credit, Ripple has partnered with financial institutions that want to test how blockchain technology can improve their business practices. But I'm skeptical that the big banks that handle most worldwide capital flows will cede power to Ripple by using XRP, unless they stand to lose a major money maker of their own.

Finally, the dominance of Bitcoin is also a risk to the ultimate success of XRP, in my opinion. With a market cap of $1.2 trillion, the leading crypto network can perhaps find more utility for more frequent large money transfers. To be fair, it needs to develop scaling solutions that can successfully speed up transactions. But given its decentralized nature, particularly the fact that no one controls it, it can be valuable in the global financial system where no single country or entity will be favored.

Lots of uncertainty

I think it's virtually impossible to say with any certainty where XRP will be five or 10 years from now. There is a wide range of possible outcomes, and it all depends on variables that are hard to predict.

If you're still bullish on XRP and have a high risk tolerance, then I suggest investing $100 as part of a very well-diversified portfolio. Just make sure to have patience for things to play out.

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