Why is Ripple having such poor performance?
Ripple was known as a successful crypto project aimed at businesses. The technology was based on speed, transparency, and cost-effectiveness features in the financial sector, enhancing cross-border payments and supporting CBDCs.
Ripple is one of the most scalable networks, providing unparalleled features for centralized and decentralized worlds. Unfortunately, all these advantages don’t prevent it from facing challenges and legal hurdles. In 2020, the SEC accused Ripple of unlawfully selling unregistered securities. The process has lately settled for Ripple as the winning party, but some things are still left unaddressed.
Hence, Ripple was mainly affected by the bad image created around it. Any XRP price prediction now includes a less optimistic outlook on the cryptocurrency’s development, so we can say the enforcement did them dirty.
Still, this is not the only cause that affected Ripple’s performance.
Ripple’s prone to competitive disadvantage
While Ripple is an amazing tool for businesses and a relatively safe investment for regular people, it’s still far behind other projects. XRP was released on the market in 2013, so it’s not that new to the network. Still, it hasn’t developed much since and has only remained an alternative for Ethereum or Solana.
Indeed, Ripple has distinctive features that make it special, such as the following:
- The speed of transactions is unparalleled;
- The universal currency adaptability is not limited to only one coin;
- The benefits of economic transactions;
Many organizations use Rippler for global business transactions, freelancer compensations, and remittances. Given Ripple’s security, scalability, and decentralization levels, it offers one of the best products and services on the crypto market.
Ripple’s case with the SEC influenced its brand image
One of the most detrimental factors contributing to Ripple’s lack of movement forward is the case with the SEC. The American agency assessed that Ripple raised a considerable amount of money in 2013 by selling XRP through unregistered security offerings, which is against the law.
For now, the battle has ceased, with both parties winning. The SEC achieved more authority over institutional sales but also made it possible for exchanges to allow crypto trades. Still, the entire case put a bad spotlight on Ripple, whose popularity was already affected.
Ripple’s presence on the news is scarce
Crypto news is considerably important for investors and companies as well because it shows a coin’s productivity and performance. Still, when crypto projects lack media coverage or are only talked about from a negative perspective, their popularity is slowly declining as people don’t fully trust them.
Most news covers Bitcoin, Ethereum, or other competitors. At the same time, we’re only hearing about Ripple when it comes to the case with the SEC. The company behind it could change the course of things by providing new updates or developments to put it on the news again and make investors excited about adding XRP to their portfolio.
Ripple is believed to be more centralized than decentralized
Most crypto projects choose decentralizations since users can better leverage coins in such environments. At its core, Ripple Labs is a centralized company, but some believe centralization is extended to transactions and processes, which would be against the concepts of cryptocurrency and digital ledger.
Therefore, the company has long received criticism over the technological design of the blockchain. Many see Ripple as a Bitcoin version of cryptocurrency for institutions to adopt, providing cheap, fast, and consistent services. However, these features came with a centralization trade-off, meaning the network is exposed to having single points of failure or being influenced by significant players.
Still, Ripple has the potential to recover
Despite all the legal hurdles and challenges, Ripple has the potential to become a great crypto project. Given the end of the lawsuit, experts forecast a major upswing in XRP prices in the future. A court ruling has decided that XRP is not a security, which could contribute to a significant price jump.
At the same time, Ripple introduced XRP ETFs in Europe, and they’re supposed to land in the US soon, gathering more growth opportunities. BTC ETFs were already approved by the SEC, with Ethereum ones following closely, so it might be possible for Ripple’s assets to be regulated as well.
Another interesting project from Ripple is the RLUSD Stablecoin on both Rippler’s and Ethereum’s blockchains. The stablecoin was created to add more liquidity to the network, increasing the cryptocurrency’s value and the activity on the blockchain.
The US will boost its crypto adoption
Ripple still needs to remain present on the market, considering that the US will bring more regulations to allow crypto transactions and encourage investors to contribute to their popularity. Higher adoption might trigger demand, which Ripple needs the most at the moment.
At the same time, considering that Ripple is based on a centralized company, it might be possible for it to be approved faster since it can be prone to governmental collaboration. Ripple Labs created the project to target businesses and companies, so the blockchain will surely be among traditional systems soon. The latest regulation imposed in the country is a crypto bill that will establish the creation of a legal framework for digital currencies to ensure more clarity for users and companies regarding crypto use.
Unfortunately, the SEC warned that this decision wasn’t one of the most inspired because such a bill can further increase the regulatory gaps among financial tools. The SEC also believes that cryptocurrencies should be subject to laws similar to those of other assets to avoid fraud cases and bankruptcies. Crypto users and organizations heavily supported the bill as it would allow them to finally use these assets to their own benefit without being the target of financial intuition.
What’s your take on Ripple?
Ripple was created to improve global payments through cryptocurrency and blockchain so that companies can tokenize value and manage their assets. However, it couldn’t get more popular than that due to its limited use case and court call with the SEC regarding selling unregistered securities. Ripple has the potential to become an excellent project, but it’s got to bring something new to the market.
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