CRYPTANALYSIS - HOUSE VIEW ON KEY ALTCOINS

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Disclaimer: Cryptomover is not a licensed financial advisor. The information presented in this piece is an opinion, and is not purported to be fact. Cryptocurrency is a volatile virtual commodity and can move quickly in any direction. Cryptomover is not responsible for any loss incurred by following this advice.

 

4.RIPPLE (Published: 16th Jun, 2017)

BASIC INFORMATION
Ripple was first developed in 2004 and it is still under development by Ripple Labs Inc. with the vision of enabling the world to move value like it moves information today. It is a protocol that allows institutions to transfer any kinds of assets instantaneously with lower costs.
Meanwhile, XRP is the digital currency issued by Ripple Labs. The main purpose of this currency is to act as a bridge. For instance, when two rarely exchanged assets are required to be transferred, XRP can become the intermediate currency to facilitate the process. Although it is similar to Bitcoin which can be freely traded on numerous exchanges and has a finite number of supplies, it’s main advantage is the extremely low transaction fee compared to Bitcoin. Also, some portions are retained by Ripple Labs and they are issued when necessary, hence they cannot be “mined”.

FUTURE DEVELOPMENT
With response to the critiques about Ripple Lab holding the majority of XRP, in May 2017 they announced that the firm will lock up over half of the coins in escrow contracts for 54 months at the minimum. This has removed the fear that the market will be suddenly flooded with the currency.
Also in May 2017, the company stated that Ripple has reached to six more exchange platforms including BITSO, bitbank, coinone, BitGo, AlphaPoint, and BuyBitcoin. This reduces the friction for investors send payments in these rapidly growing markets.
Nevertheless, in May 2017 the hardware wallet Ledger has announced the support for XRP. Given that there is a lack of proper XRP wallet, this would be a good sign about XRP’s future development.

TRADE SUGGESTIONS
After several announcements in May, as mentioned above, the price of XRP has dropped significantly, reflecting that investors were still not confident about the future development of XRP.
In my opinion, Ripple would be a useful replacement of the current SWIFT banking system, it just needs more time to develop the technology and negotiation with the banks. However, the coin XRP is not particularly valuable as it is not technologically innovative and its value should remain stable in the long run so there is not much potential for profits. Therefore, it is suggested selling XRP.

INVESTMENT RISKS
In fact, XRP is not suitable as an investment due to its inherent nature. Unlike other traditional cryptocurrencies, it acts as a tool to facilitate the functions of the Ripple network, but not a store of value. Also, XRP is centralised by Ripple Labs and they have stated that they do not promote XRP as a speculative investment. Therefore, it is not suitable as a long-term investment.

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