Best Cryptocurrency to Purchase for $1,000

The native cryptocurrency of the Ripple network, XRP (CRYPTO: XRP), has dropped more than 80% from its peak in the early months of 2018. As more businesses routed their gross payments, remittances, and foreign currency transactions through Ripple's blockchain, the bulls had first predicted that XRP would acquire more traction. With its ledger, Ripple asserted that it could offer its clients instantaneous, safe, and "nearly free global financial transactions of any size with no chargebacks."

A number of smaller financial institutions, such as Sentbe, Travelex Bank, and Tranglo, used Ripple's network as a less expensive substitute for the majority of banks' use of the SWIFT (Society for Worldwide Interbank Financial Telecommunication) protocol. Nevertheless, the majority of those clients did not switch to XRP as a substitute payment mechanism; instead, they only used Ripple for fiat currency transactions. In December 2020, Ripple was sued by the U.S. Securities and Exchange Commission (SEC) for raising $1.3 billion via the sale of XRP tokens. The SEC claimed that this was an unlawful transaction of unregistered securities.

Because XRP was not mined using the proof-of-work (PoW) protocol or staked using the proof-of-stake (PoS) protocol like other tokens, many investors contended that it was not even a legitimate cryptocurrency. Rather, in order to stabilize its supply and liquidity, it locked away 55 billion of its 100 billion tokens in escrow accounts, pre-mined the total amount of tokens before launching on the market.

The price of XRP was destroyed by all of these problems, as well as by growing interest rates and the crypto winter. However, I think that over the next few years, if some significant catalysts materialize, this high-risk token might still turn $1,000 into tens of thousands of dollars.

The biggest near-term catalyst for XRP

The largest obstacle for XRP was the SEC litigation, which was ultimately resolved in early August with a decision that favored Ripple. At first, the SEC had sought a $2 billion fine, which was more than the token offering's size. However, it then reduced that request to $1 billion plus interest. Ripple stated time and time again that it would only foot the $10 million fine.

At the conclusion of the trial, U.S. District Judge Analisa Torres fined Ripple a meager $125 million. In her most recent decision, Torres upheld her earlier determination that XRP coins could not be categorized as unregistered securities. If there was no litigation looming over XRP, its price might rise till the end of the year.

The other key drivers of XRP

Even while the majority of investors believe that the SEC lawsuit's successful outcome will be the largest short-term driver of XRP, there are still other positive factors to consider. Initially, later this year, $10 million in tokenized U.S. T-bills on the XRP ledger and Ripple's own stablecoin, Ripple USD, will be released. Second, it has been claimed that Ripple is preparing to enhance the XRP ledger by adding new features for creating dynamic non-fungible tokens (NFTs) and decentralized finance (DeFi) applications. These additional initiatives and other uses could increase Ripple's popularity and keep the price of XRP stable.

Finally, decreased interest rates would most likely encourage more investors to turn to speculative cryptocurrencies once more. To ease concerns about a recession, some analysts think the Federal Reserve may cut its benchmark rates as early as September. If this happens, XRP and other altcoins might rise significantly. But don't overlook persistent difficulties.

Although XRP's price may peak this year, unpredictability in macroeconomic conditions and competition from speedier blockchains like Ethereum and Solana might yet stifle its growth. It's not a given that the addition of new services to Ripple's blockchain will increase the value of XRP. However, it would be a good idea to purchase $1,000 worth of XRP from the more speculative side of your portfolio before its short-term headwinds disappear, despite those uncertain hurdles.

Is it wise to put $1,000 into XRP at this time?

Take into account this when purchasing XRP stock:

The Motley Fool Stock Advisor analyst team has determined the top ten stocks that investors should purchase right now. And one of them wasn't XRP. In the upcoming years, the ten equities that made the cut might yield enormous profits.

Considering that Nvidia created this list on April 15, 2005, at the time of our recommendation, $1,000 would have earned you $641,864!

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