Anyone considering delving into the world of cryptocurrencies must take into account the inherent volatility that is part and parcel of the rollercoaster-like space.
That said, investor Will Ebiefung, who sits in the top 2% of TipRanks’ stock pros, points out that even in the dizzying world of crypto, a tried and tested investing method should prevail.
“Long-term investing can help smooth out these short-term fluctuations and give time for an asset’s fundamental value to shine through,” Ebiefung noted.
This theory could well apply to Ripple (XRP), says Ebiefung, as it “benefits from several growth catalysts over the next three years and beyond.”
While it’s true that over the short term, cryptocurrencies often rise and fall together due to market sentiment, over time winners emerge, and these can boast of lasting gains. XRP, with a $148 billion market cap and a history of growth since 2012, possibly owes its resilience to the fact it has “real-world utility.”
RippleLabs, which developed XRP, recognized early on that crypto could be a disruptor of the $2.4 trillion international payments market, currently dominated by outdated systems like SWIFT. These systems are often slow and costly, with international wires taking days and costing up to $75. XRP acts as a bridge currency, allowing users to convert funds between different currencies without traditional intermediaries. While other cryptocurrencies offer similar functionality, XRP stands out for its speed and low costs.
So, what are these catalysts Ebiefung thinks lie in store for XRP? Well, for one, crypto is expected to gain more adoption over the next three years. Under acting director Mark Uyeda, the SEC is focusing on regulatory clarity rather than enforcement, which Ebiefung thinks is a “positive trend.”
Meanwhile, after the SEC dropped lawsuits against Coinbase, Consensys, and Kraken, Ripple CEO Brad Garlinghouse announced today that the SEC had dropped its appeal in a security classification case against the company. That could ease regulatory uncertainty and encourage institutional investment in XRP.
“Institutional investors such as mutual funds, pension funds, and even insurance companies could be the key to sustainable growth,” says Ebiefung. “Unlike retail investors, these organizations are very large and liquid, making them more likely to hold for the long term and less likely to panic-sell because of short-term price fluctuations.”
Then there’s the prospect of XRP-based ETFs. While none are yet available in the U.S., companies like Grayscale, known for its Bitcoin and Ethereum ETFs, have filed to launch them.
So, should investors consider loading up now on XRP?
As Ebiefung notes, crypto is highly volatile and unpredictable, but he believes that over the next three years, XRP looks “capable of outperforming its peers because of its potential for real-world utility and institutional adoption once legal uncertainties clear up.” (To watch Ebiefung’s track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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