XRP: Reasons why the crypto is worth an investment
Since Monday, the price of XRP, the sixth-largest cryptocurrency on the market, has been rising, most likely influenced by the price movement of Bitcoin and the general bullish market trend. In turn, this has led to an increase in XRP’s market capitalization from $20 billion to a new year high of $25 billion, further reiterating its upward trend.
XRP is currently trading at $0.470, just shy of the $0.50 mark after breaking out to the $0.490 level as of this writing. This indicates an increase of almost 23% over the past week, which is consistent with the increasing trend of other significant cryptocurrencies.
Why is XRP bullish?
The current increase in XRP can be attributed in large part to the XRP Ledger (XRPL), a decentralized blockchain platform backed by the fintech startup Ripple.
In spite of external pressure from US regulatory authorities regarding the potential classification of XRP as a security, the XRPL seeks to provide a digital payment infrastructure not only for individuals but also for established financial entities like central banks, according to a recent study by the market research firm Messari.
The usage of the XRPL has grown dramatically since February, as shown in the chart above, and it is thought that this has contributed to the price increase of XRP. As more organizations and individuals use the XRPL for cross-currency transactions and other use cases, this increased use may be increasing demand for the token.
The rise in XRP demand brought on by the XRPL’s wider acceptance may be a major factor in pushing the price above $0.50. The price of XRP is likely to rise as more purchasers compete for the finite amount of available supply.
XRP’s price to go up
Messari’s article also mentions that “rippled,” a free and open-source program, is used by all XRPL nodes to validate and process transactions. To take part in the consensus procedure, validators who propose and vote on transactions must possess a specific amount of XRP.
According to the paper, the network’s security and effectiveness are ensured by the increased participation of validators. As additional validators acquire the token as collateral, the demand for XRP increases. The consequent spike in demand could cause the price of XRP to soar. Furthermore, the generation of fresh blocks, or “ledgers,” every 3-5 seconds contributes to the prompt and effective processing of transactions on the XRPL, where both consensus and validation demand 80% criteria.