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How to Invest In Ripple In 2024

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By Hanut Singh - Updated 29 November 2023
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Ripple has left a huge impact on cryptocurrency, having established itself as one of the world’s leading tokens by market capitalization. Ripple is a real-time gross settlement system, currency exchange, and remittance network that 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.

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.

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.

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 for 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.

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Ripple Investment Strategies

There are a variety of ways to invest in Ripple ensuring you don’t miss investment opportunities. The following section provides the required details of all popular Ripple investment strategies along with when and how you can use them.

Buy and ‘Hodl’

What is it?

‘Hodl’ or ‘hodling’ refers to an inside joke of the online crypto community. It is just the word ‘hold’ which has been misspelled. As the term would suggest, this strategy is all about purchasing Ripple and holding it for the long term so you can gain major rewards in the future.

Seeing the overall lifetime ROI of XRP, it would be an understatement to say that the strategy has done pretty well for many investors who had the discipline and patience. Hodling might be the most effective investment strategy for inexperienced investors.

How to use this strategy

Putting ‘hodl’ strategy into action is quite easy. You just need to register and verify yourself on an exchange and buy XRP using the process described above. And then you hold your Ripple coins. As ‘hodling’ is a long-term strategy, you need to be disciplined and patient for the strategy to work. There will be moments where you would want to get out in the short term keeping your modest profits but you will need to resist the urge to give in.

When to use this strategy

The most effective way to rely on ‘hodl’ investment strategy is to get in when the price of Ripple is witnessing a decline. Buy XRP coins with your funds and hold them in a secure hardware wallet. You have to bear in mind that the cryptocurrency market is highly volatile so you will probably see many inclines and declines in XRP price.

Don’t let the unpredictability of the market impact you and hold onto your investment. Your discipline and patience are the only things that could help you in the long run.

Buy Ripple ETF/CFD

What is it?

ETF is a financial instrument that stands for Exchange-Traded Fund and it provides you with a simple way to invest in XRP. The instrument is widely used by stock investors as it tracks the price of the coin on the market. Generally, ETFs include more than one asset to diversify your portfolio for risk minimization.

The subsequent increment and decline in the price of the assets that ETF represents impact its value. It is one of the most efficient ways to invest in XRP for those who don’t want to deal with the hassle of learning about cryptocurrencies and the trading market.

Similarly, if you just want to bet on the price of XRP, you can use Contracts for Difference (CFD) which allows you to buy a position without actually purchasing the coin. This facilitates you to invest without dealing with the issues that come with owning XRP and other cryptocurrencies like managing your XRP wallet.

How to use this strategy

You can use this financial instrument strategy by registering and verifying your identity on a broker website. Some of the top brokerage services like Plus500 and eToro provide you with the option to buy and sell crypto financial instruments including ETFs and CFDs.

You will need to verify your account as major scale trading partners comply with AML and KYC regulations to ensure they are providing a safe and secure investment environment.

When to use this strategy

If you are an individual or an investor who just wants to keep it all business instead of learning everything about the asset and dealing with its technicalities, financial instruments including CFDs and ETFs are for you. Owning Ripple or any other digital currency comes with a set of responsibilities like learning about wallets, blockchains, and other technical stuff which can be both time-consuming and difficult for most people.

Investing in Ripple using financial instruments gets rid of that challenge.

Long Position on Ripple

What is it?

Long position trading is all about opening a betting position on the upward price movement of XRP. Long positions are often opened through leveraged trading which allows you to invest more money than you have in your account.

This particular investment strategy is not recommended for those traders who are just starting out as it comes with a lot of risks and requires a deep understanding of the financial markets.

How to use this strategy

If you are interested in opening a long position on XRP, you will have to sign up on your preferred brokerage website. Enter the amount of your position and select your leverage’s extent in terms of percentage. You will also have to specify the price of XRP at which you want to go in.

Once the Ripple price hits that mark, your position will be opened and you can close it any time you want if the price continues to rise.

When to use this strategy

The long position and leverage trading strategy must only be used by experienced traders in a market that’s going through a bullish trend. When XRP token’s price is experiencing an upwards rally due to a multitude of market factors, you have the option to capitalize on that momentum if you know and understand the market dynamics.

That’s why if you keep yourself in the loop and learn about market developments, you can identify good investment opportunities. That being said, minor price depreciation can also lead to liquidation if you are not careful. That’s why it is important that you only invest the amount you can afford to lose, especially if you are undertaking risky bets through leveraged trading.

Benefits of Investing in Ripple

Capital Appreciation

The most prominent benefit of investing in Ripple is its ability to increase in price, which could net a healthy profit for those who invest at the right time.

While the token has faced regulatory hurdles the past few years that weighed heavily on its price, recent legal victories, most notably the landslide win against the SEC, have lifted much of that weight.

Exposure to Blockchain Adoption

Ripple is a token that powers a global payment settlement network with institutional applications. Ripple’s services have already been mainstreamed by businesses and institutions that engage in international payments.

While an investment in Ripple does not directly correlate to an investment in the company or its services, the success of the company and its settlement network will be reflected in the token’s price.

Income Generation

Platforms like crypto exchanges offer rewards for staking or lending cryptos like Ripple. In addition to capital appreciation, investors can earn income from lending their tokens to exchanges.

For example, Binance offers a flexible Ripple savings package that yields 1.3% annually. While some may consider the yield small, it is a good source of side income, especially if your main reason for buying Ripple is capital appreciation.

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 Associated With Investing in Ripple

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 of Investing in Ripple

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 marketplace, 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 for Investing in Ripple

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.

Other Ways to Invest in Ripple

Buy Crypto ETFs

Exchange Traded Funds (ETFs) are financial products that allow investors to gain exposure to entire market segments or to make diversified investments without buying multiple assets.

A spot crypto ETF is ideal for investing in Ripple without buying it outright. ETFs like the Bitwise 10 Crypto Index Fund (BITW) allow investors to gain exposure to Ripple and several major cryptos by holding them in specific proportions.

On the investor’s end, they only buy one asset, the ETF.

Run a Server

Tech-savvy investors can run a validator node on Ripple’s public ledger. You’ll help process transactions, contribute to the network’s decentralization, and be rewarded with XRP tokens.

Suffice it to say that running a validator may not be viable for all investors as it requires technical knowledge and upfront capital on internet connection, equipment, cooling, and security before a dime is made.

Buy Derivatives

Derivatives are various financial instruments that help investors carry out specific actions with or around assets and securities. For example, a Futures contract allows investors to lock in a price for a volatile asset and buy the asset at the agreed price in the future.

A Contract for Difference (CFD) tracks the underlying price of an asset and allows trades to trade the contract in place of the asset.

Various derivatives allow investors to profit from Ripple’s price movement without buying it directly.

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 crypto trading bots are also worth investigating.

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

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.