Ripple has become a popular topic lately as it became the #2 cryptocurrency for a brief period last week. While it was trading at around $0.20 just last year, it's now worth more than $0.71 per coin and continuing to rise. It's important to note that Ripple is the company, and XRP is the coin, but most people simply call it Ripple.
Ripple (XRP) is a different than many other popular cryptocurrencies because it was created by a private, for-profit company. This company wanted to enable a frictionless way to send money globally, and it's coin Ripple is the way it does it. This company is also the largest holder of Ripple today.
The problem is, Ripple didn't used to be the easiest crypto currency to buy (but that's changed). It used to require some additional steps compared to investing in Litecoin or Ethereum. But let's break it down and show you what to do.
Note: In 2020, the SEC filed charges against Ripple and two founders in regards to XRP. Make sure you do your due diligence before investing, as the token is getting de-listed on many exchanges. In fact, Coinbase is suspending trading on XRP effective January 19, 2021. See the SEC action here.
What Is Ripple?
Ripple was originally (and still is) a payment processing platform that allows global transactions using it's coin, XRP. It's global payment network was started in 2012, and has continued to grow as companies have adopted it, and currency speculators have taken interest in Ripple.
Ripple uses a blockchain ledger similar to Bitcoin and other crypto-currenies, but it also has come technical differences that claim to make it easier to process transactions, and more importantly, faster while remaining secure.
How Ripple Is Different
Ripple is different than it's major competitors Bitcoin and Litecoin in that it was created by a private, for-profit company. When it was created, 100 billion XRP were released into the market, with 20 billion being held by the creators and the rest being given to Ripple Labs. Ripple Labs has since placed 55 billion XRP in an escrow account to ensure users stability in the marketplace.
It's important to note that Ripple has been called a "Bitcoin-killer" since at least 2014, but it's only recently that is has gained real traction and momentum among crypto-currency enthusiasts.
Ripple has had explosive price increases similar to other currencies recently, but it's still very "cheap" in terms of price.
How To Invest In Ripple
First, realize that Ripple is subject to an SEC investigation and many exchanges have de-listed the token. These directions are outdated.
As we mentioned earlier, Ripple is not "easy" to invest in. It used to require multiple steps - from investing in a basecoin, then transferring your account, then investing in Ripple (since it's an alt-coin).
If all that sounds foreign, check out this guide on How To Invest In Cryptocurrency.
With that said, here's the steps you need to invest in XRP:
1. Create A Coinbase Account
The first thing you need to do is setup a Coinbase account. Remember, you can get a bonus of $5 if you deposit $100!
Coinbase is a very popular choice because they have some of the most popular currencies easily available for purchase on their app or website.
Read our full Coinbase review here.
One of these is XRP (Ripple) - which you can easily buy on the app, along with Bitcoin and others. Plus, you can easily transfer US dollars in and out as well.
2. Buy Ripple
Once you have your Bitcoin in your account at Coinbase, you can buy XRP.
In your Coinbase account, simply click on Ripple (XRP) and place a trade.
Once you place your trade, it will show up in your Coinbase account.
Having everything in your Coinbase account makes tracking and following up on your cryptocurrency easy.
Like any currency, there is a high degree of risk involved if you're considering investing in Ripple. However, given the low price point, it does have the possibility for a high return with low barrier to entry.
If you don't like the idea of a digital wallet and/or all of these steps, there are no ETFs that track Ripple yet.
You never know, Ripple could skyrocket as high as Bitcoin is today, and you might be thanking yourself in several years.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.