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How to Invest In Ripple In 2022

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Author: Hanut Singh Updated: March 10, 2022

Ripple has left a huge impact on cryptocurrency, having established itself as one of the world's leading tokens by market capitalisation. Ripple is a real-time gross settlement system, currency exchange, and remittance network which is seen as being particularly valuable in processing transactions for overseas payments.

Created by Ripple Labs, Ripple first emerged in 2012, and offers secure, instant ,and almost free cross-border payment protocol and financial transactions. Its native cryptocurrency is referred to as XRP. Ripple was conceived by Jed McCaleb and built by Arthur Britto and David Schwartz, after many years of discussion. 

Ripple uses a common shared ledger—a distributed database that stores information about all Ripple accounts. If you’re wondering how to invest in Ripple, then this guide will offer some common strategies for investing in XRP. 

Use our guide and find out even more about Ripple, XRP and RippleNet all work.

4 Ways to Invest in Ripple

There are several ways to invest in Ripple, and here are four of the most prominent. All these strategies can be used with or without leverage. 

1. Buy Ripple Through a Cryptocurrency Exchange

Firstly, Ripple is available via many exchanges, which offer a variety of cryptocurrencies. While each of these cryptocurrecy exchanges features its own storage methods, it is advisable to download and use a storage wallet for Ripple. In addition, there are also hardware wallets available for storing your purchased XRP which include the following:

Users can also make use of software wallets or paper wallets. Paper wallets have declined in popularity after the emergence of hardware wallets. Be sure to select an XRP wallet type that allows you to trade Ripple digital assets at the pace that you require, hardware wallets while more secure take more effort to make transactions.

People wishing to buy sell and trade Ripple will also need to join a cryptocurrency exchange. This involves a process of registration, during which investors will be required to confirm their identity. Purchases usually take place with fiat currency, although other payment methods are usually available as well, including other cryptocurrencies.

Part of the registration process for Ripple typically involves a concept referred to as Know Your Customer (KYC). This means that cryptocurrency exchanges need to verify the identity of their customers under customer identity verification practices. Typically, account activation will require some government documentation and proof of address.

Our Recommended Cryptocurrency Exchange

There are a variety of exchanges for the purchase of Ripple, and in this section, we will give our recommendations on the crypto exchanges available.

1
Min. Deposit
$10
Promotion
User Score
10
Accepts customers from the USA
Deposit $100 and get a $10 bonus!* Build a diversified portfolio with crypto, stocks, and ETFs — all in one place
Trade on the world's leading social trading and investing platform
Start Trading
Payment Methods:
Bank Transfer, Wire Transfer
Full Regulations:
CySEC, FCA

2. Buy Fractions of Ripple Through an Exchange

Due to the low price of XRP, Ripple isn't one of the cryptocurrencies that can be bought in fractional quantities. Bitcoin and Ethereum are among the cryptocurrencies for which this option is available.

3. Trade Ripple Through a Broker

Trading through a broker is also possible for Ripple, and this differs somewhat from the cryptocurrency exchange method. 

A cryptocurrency broker effectively acts as a middleman between the cryptocurrency market and an investor. Ripple brokers enable you to buy and sell at set prices for XRP, and act as trading professionals for those who have either limited time or knowledge.

Any broker trading Ripple or other crypto assets must have acquired a huge amount of knowledge about how markets work, and how trading mechanisms operate. Crypto trading is relatively complex, and therefore brokerages have become a popular option for people dipping their toes in the pool for the first time.

Another useful aspect of cryptocurrency brokerages is that they tend to provide a variety of other services as well. It is important, though, that you ensure a high level of competence when choosing a cryptocurrency broker. 24/7 access via both mobile and desktop platforms is also to be recommended.

Our Recommended Broker

While there are a huge amount of brokers available for Ripple, we do have a recommendation about the marketplace.

1
Min. Deposit
$10
Promotion
User Score
10
Accepts customers from the USA
Deposit $100 and get a $10 bonus!* Build a diversified portfolio with crypto, stocks, and ETFs — all in one place.
Trade on the world's leading social trading and investing platform
Start Trading
Description:
eToro offers a wide range of cryptos, such as Bitcoin, XRP and others, alongside crypto/fiat and crypto/crypto pairs. eToro users can connect with, learn from, and copy or get copied by other users.
Payment Methods
Bank Transfer, Wire Transfer
Full regulations list:
CySEC, FCA
Cryptoasset investing is unregulated in some EU countries. No consumer protection. Your capital is at risk.

4. Invest in a Ripple ETF

ETFs (Exchange Traded Fund) can also be used to trade cryptocurrency, which is a traditional method of trading in the stock market. ETFs track an index or basket of cryptocurrencies, enabling several tokens to be combined into one asset class. Digital token ETF trades work like a common stock on an exchange, and are subject to fluctuations in price throughout the day.

An ETF is often seen as a remedy to the barriers of entry in the cryptocurrency market, as it provides a basket of differing digital tokens that could be suitable for beginners. There are also alternatives available on the market that enable traders to invest in cryptocurrency without requiring investors to manage the digital assets themselves.

5 Ripple Investment Strategies

There are a variety of Ripple investment strategies available, but in this section, we’re going to look at five of the most popular and credible.

1. Buy and ‘Hold’ 

What is it?

Of all Ripple investment strategies, buying and holding undoubtedly involves the longest term investment. This approach is based on purchasing Ripple tokens, and then holding them over a period of time, with the hope that price discovery will head in an upwards direction.

Those who invest in Ripple with a buying and holding strategy believe that it is a good long-term investment opportunity. While this approach may particularly appeal to digital asset enthusiasts, everyone up to institutional investors may be potentially interested in incorporating this approach.

Those looking to try out this strategy can benefit from how to buy Ripple guide.

What is the benefit of using this strategy?

The major benefit of buying and holding is that it offers a return over a long period. It is a strategy that leans on the fundamentals of cryptocurrency as an asset class.

Buying and holding Ripple is also a low maintenance approach, which requires neither a huge amount of market and trading knowledge, nor regular activity in the market. It would therefore appeal to non-professional investors.

2. Day Trading

What is it?

Day trading involves buying and selling assets within a single trading day, and is often used by professional market participants. Typically, day trading is most popular in the foreign exchange and stock markets, but there is no reason that you cannot trade cryptocurrencies, such as Ripple, as a day trader as well.

To engage in day trading, it is necessary to be extremely knowledgeable about the market, as well as well-funded. Day traders typically use large amounts of leverage, and sometimes rely on complex trading strategies. To succeed with day trading, it is necessary to capitalise on tiny price movements, which occur regularly during an average day's trading.

Day traders will often be particularly interested in events that cause short-term moves in the market, such as economic statistics, corporate earnings, and interest rates. High-frequency trading is one form of day trading that has also become prominent in recent years.

What is the benefit of using this strategy?

One of the most obvious advantages of day trading is that it produces instant results. Day trading happens over a short timeframe, meaning that you don't have to hold on to Ripple tokens over a significant period of time. In fact, you can enter and exit trades within a matter of minutes. This can sometimes result in a profit of hundreds, or even thousands of dollars, so it's no wonder that day trading is hugely popular.

Day trading can also provide more leverage than holding positions overnight. However, the general consensus of opinion will be that you need to be an expert in order to participate in day trading. It is certainly very easy to lose your capital via day trading if you're not well informed and particularly confident. Day trading involves more risks than other forms of trading, and thus is not recommended for beginners.

3. Shorting

What is it?

Shorting effectively involves betting against Ripple, predicting that the cryptocurrency will lose value in the short to medium-term. Also referred to as short selling, this practice has been part of the mainstream financial architecture for many years, but can now also be used in the cryptocurrency niche.

Effectively, by short selling any asset, you are indicating your scepticism about its market position, either suggesting that it is overvalued, or that some factor will influence its price in a negative way. Many prominent industrial investors have engaged in short selling, and it can often reap massive rewards when market trends are correctly predicted.

What is the benefit of using this strategy?

The major benefit of shorting is that it enables investors to make profits even in a bear market. When buying and holding Ripple, for example, it is required for the token to increase in value to make any profit. This doesn't apply to shorting, in fact, the complete opposite is applicable.

Another advantage of short selling is that it enables investors to take a hedging position when investing in cryptocurrencies. This can then protect them against what can be a volatile marketplace. We will discuss hedging more in due course.

4. Using a Trading Bot for trading

What is it?

Trading bots have become hugely popular in recent years, as the sophistication of algorithms and robotic traders has increased. Trading bots promise to deliver big profits via artificial intelligence and machine learning techniques. 

These robotic traders make it possible for investors to execute trades, without having to do so manually. This obviously reduces the workload involved in cryptocurrency trading, and also means that investors do not need to be experts in tokens such as Ripple to invest. While Bitcoin trading bots are prominent, XRP trading bots are harder to come by.

What is the benefit of using this strategy?

The immediate advantage of trading bots is that they obviate any need for human involvement in the trading process. This can be beneficial on numerous levels, but it is particularly helpful for beginners, who can now invest in the cryptocurrency marketplace without needing to acquire expert knowledge.

Trading bots also remove human error and emotion from the process, while benefiting Ripple traders from rapid data analysis and other sophisticated aspects of trading software.

5. Hedging Ripple

What is it?

Another trading option with Ripple is to hedge the cryptocurrency or use the token as part of an overall hedging strategy. This effectively means using trades to buttress your existing trading position, effectively using trades as insurance against undesirable results in the market.

While Ripple itself can be used as a hedge against other investments, it is probably more likely that investors would choose to hedge against Ripple experiencing fluctuations in value, due to the relative volatility of the cryptocurrency market. 

What is the benefit of using this strategy?

Hedging is a safety-first strategy, which forms part of the approach for most institutional investors. It enables both beginners and experienced traders to protect themselves against unpredictable market behaviour.

Invest in Ripple

What to Consider Before Investing in Ripple

There are a variety of issues that investors should take into consideration before investing in Ripple, so we will discuss some of these factors.

Fees

The cost of a standard transaction on the Ripple payment protocol is about 0.00001 XRP. The cost of 1 XRP is currently around $0.29 at the time of writing. This means that fees associated with Ripple are practically non-existent. Some exchanges will also charge fees, with Binance charging 0.1% commission, as an example. Certainly, Ripple is very competitive in this department, which is why it has been used as a method of international exchange.

Risks

There are several risks associated with trading Ripple and other cryptocurrencies, and smart investors will definitely take these into consideration before entering the market.

Firstly, the cryptocurrency market is known to be rather volatile. Changes in market sentiment happen rapidly in the cryptocurrency market place, and this can result in pronounced and unexpected moves in price. This can be an advantage for traders, as it can result in big profits, but it can also leave investors vulnerable at times.

While regulations associated with cryptocurrencies have been increasing, they can still be considered relatively unregulated compared to other aspects of trading and financial systems. There are still question marks regarding whether cryptocurrencies should be classified as commodities or virtual currencies, and this can lead to some uncertainty in regulating terms.

Cryptos and altcoins can also be hacked, and it will be impossible to devise a token that is completely invulnerable to technical glitches or human error. However, it should be noted that all investments are potentially vulnerable to theft; cryptocurrencies are certainly not unique in this regard.

Cryptocurrencies can also be discontinued, or changed in nature by forks. This could lead to an investment being suspended, which would obviously be undesirable. Trading cryptocurrencies with CFDs is also unpredictable and particularly volatile, and this is something else to bear in mind when entering the Ripple marketplace.

Payment methods

There are a variety of payment methods available for Ripple, with the most obvious being the many available fiat currencies. PayPal, Neteller, and Skrill can also usually be used, while the market-leading Bitcoin is another option. 

Why Invest in Ripple?

Ripple performed superbly in the marketplace during the first half of 2021, increasing in value by around 300%. This is one of the many reasons making a convincing argument for investing in this crypto token.

The long-term potential of the Ripple network is also generally considered to be positive by veteran investors. Of all cryptocurrency tokens, Ripple is probably the most accepted by the established financial architecture, thanks to its particular properties. Ripple is seen as a popular platform for cross-border transfers, which means that the crypto token already has an important use case.

This has been instrumental in the success of Ripple, with the cryptocurrency having established itself as one of the most prominent in the market. Many traders and market observers believe that Ripple will increase rapidly in value in the years to come, as its assets become more obvious. Furthermore, it is predicted by many that Ripple will also become part of everyday life and transactions, thanks to its affordability as an international solution.

Summary of Investing in Ripple

Ripple is unquestionably one of the top cryptocurrencies and has been hugely successful during its relatively short life. It has many qualities, especially the affordability of transfers associated with the token. 

Ripple is also a popular trading mechanism, and there are a host of methods available for those investors looking to profit from it. Both long and short-term strategies are available, while trading bots are also worth investigating.

With investors diversifying their investments in the cryptocurrency field, Ripple has lost a little of its lustre in recent years, with other coins exceeding its market capitalisation.

Ripple is definitely here to stay, and many investors believe that eventually, it will become part of everyday life, largely driven by its cross-border transaction capability.