Ripple or XRP: are they synonyms or different terms? If you are new to the crypto market, you may have such questions in your mind. Thus, we will start our price guide with basic terms. It will allow you to differentiate Ripple’s products.

Put simply, Ripple is a company that provides a payment protocol that can be compared to a payment system, money transfer network, and currency exchange. The protocol works with digital currencies, fiat money, and commodities. XRP is the protocol’s internal coin. 

If you want to have a deeper understanding of the Ripple topic, check the following terms. 

  • XRP or Ripple is a cryptocurrency that’s powered by RippleNet. Financial institutions use the coin to provide fast transactions with low fees. 
  • RippleNet represents a payment platform. It’s based on the distributed ledger database of XRP Ledger. Ripple operates the digital platform. RippleNet Cloud is used to deal with payments with one integration and a common Ripple Payment Object among RippleNet’s customers. It allows for “less friction and more standardization when customers are ready to scale.” 
  • As for the XRP Ledger, it’s open-source and is based on the ledger database, not blockchain. 

Taxation on XRP

A Crash Course on Ripple XRP

Ryan Fugger was the first person who announced the idea of Ripple. It was in 2004. However, the protocol’s real history started only in 2012 when Jed McCaleb and Chris Larson took over the project. That time it was not even Ripple but OpenCoin.

First, it was a startup project from San Francisco; the blockchain-like payment system was developed. It was created as an alternative to money transfers for the banking system, not as an opposition. Its popularity among financial institutions grew fast, and soon the company announced interest from leading banks. It was expected as the system enforced low-fee fast transfers all around the world. 

Banks apply the protocol to make cross-border transfers in real-time using the xCurrent software solution. At the same time, Ripple (XRP) is also available for investors and traders. Traders can do operations with the cryptocurrency via trading on crypto exchanges or with the help of brokers. The company has had contacts at the highest political and financial levels for many years. Think of the World Bank, the ECB, the IMF, and the World Economic Forum. With rave recommendations and being priced from all sides – what could go wrong?

Here we are. It’s time to find out what is expected of Ripple in 2021 and beyond. 

How Has The Price Of Ripple Changed Over Time?

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XRP was stable from its launch in 2013 until early 2017, when the sideway movement ended. By the end of 2017, its price skyrocketed by 35,000%. This success occurred as Ripple managed to achieve a threshold of 100 banks worldwide that signed on to RippleNet. 

On January 4th, 2018, the XRP/USD rate reached an all-time high. However, it couldn’t sustain those levels, and it subsequently dropped by 76% within one month. The plummet was caused by fears of new regulations on the Asian markets. This factor affected not only XRP but also other cryptos. In 2018, the total market cap for cryptocurrencies declined by around 43%. 

The sharp downtrend that continued until February was also boosted by other factors. Facebook declared it would ban advertisements for cryptocurrencies and ICOs. US regulators summoned Bitfinex and Tether to a court. The further decline was spurred by the finance minister of India, who said the country would do everything it could to discontinue the use of virtual currencies. 

However, the year did not only bring bad news for XRP. A significant surge took place in September 2018. Within several days at the end of September, Ripple grew by over 140%. The XRP/USD rate was pushed up after Ripple’s Head of Regulatory Relations for Asia-Pacific and the Middle East, Sagar Sarbhai, said the company would release a product to expedite bank transactions with the use of XRP. 

2019 was quite stable for Ripple, with no dramatic ups and downs. As the Ripple network is very active in Southeast Asia, news on cross-border payments and state cryptocurrencies in this region significantly impacts its price. For instance, the XRP’s rate moved up after Japan and South Korea started working on time and cost reduction for transferring international funds between the two countries. By the end of 2019, the downtrend strengthened.

Unlike other crypto assets, which started an upward movement in late 2020, XRP’s price spiked by the middle of 2021 and later, after one more plunge, reached a good price in August.

What Happened to XRP in 2020 and 2021? 

During 2020, the XRP market price was relatively stable with several medium-term bullish and bearish trends. After the upward movement at the beginning of the year, the price was declining for a month, from February to March. The next bullish trend occurred in July but finished in less than a month. The main rise happened in November when the price hit a maximum of $0.79. 

Why is Ripple going up or down? If you think that something specific is hidden behind these price movements, it’s a mistake. The major Ripple trends are positively correlated with BTC movements, so even Bitcoin halving can affect the XRP price. The cryptocurrency repeats the trend of the primary market. 

Still, there were some certain events we should mention. Investors’ sentiments determine the price direction of any asset. Ripple supply/demand factor plays a huge role. In April 2020, the co-founder of Ripple Jed McCaleb sold 54 million Ripples. It’s not a surprise that the price moved down after the event became public. 

New agreements with leading banks are one of the main drivers of XRP’s price. For example, in August, India’s largest bank HDFC Bank Limited joined RippleNet, in November, the second American largest bank, the Bank of America, signed an agreement with Ripple. 

In December, such leading US exchanges as Coinbase and Binance claimed support for the upcoming airdrop of Spark tokens by Flare Networks. The Flare airdrop took place, and 45 billion Spark tokens were distributed among the XRP holders. The XRP price increased on the news; however, it was corrected shortly. 

Such events have short-term market effects that aren’t visible on high timeframes.

Well, we have come to the most significant event that is still affecting Ripple. The SEC, the US stock market watchdog, is challenging blockchain company Ripple Inc. in court, along with its two top figures, CEO Brad Garlinghouse and founder Christian Larsen. The regulations in the US are tough. The Securities and Exchange Commission’s accusation is that unregistered securities worth $1.3 billion were sold in 2013. It is an old case hanging over Ripple for as long as we can remember. Ripple has always maintained that digital currency is a currency instead of a security. Because otherwise, they’d have to comply with a lot of different rules according to American law. Many are amazed that the US apparently wants to slaughter the goose that lays the golden eggs.

In two days, from December 22 to 23, 2020, the XRP rate dropped from approximately $0.50 to just under $0.30. From third place as the most important cryptocurrency, the coin moved to fourth place, behind stable coin Tether.

XRP started 2021 at lows. Only on January 30th did the cryptocurrency break above $0.40. After the breakthrough, XRP was trading within a narrow $0.40-0.60 range from the end of January to April 4th. The strong uptrend started on April 5th and lasted until April 14th, when the price reached $1.80 (the high of January 2018). The surge was caused by two court rulings in favor of XRP. 

Currently, Ripple is the seventh most popular cryptocurrency in the world, as stated by CoinMarketCap.

However, from April to June, the market saw a strong drop in the XRP rate – more than two times: from $1.83 to $0.51. This happened amid the ongoing litigation between the SEC and Ripple, but the reason was the overall negative dynamics of the crypto market, which collapsed from previously reached historical highs. In June, the SEC requested to extend the case consideration by two months, which the court granted. From June to the beginning of September, against the backdrop of a lull in the court, XRP’s rate increased from $0.51 to $1.39.

However, XRP couldn’t maintain its bullish trend and plunged on September 7. The significant plummet was caused by the fall of BTC. Experts couldn’t find the real reasons for Bitcoin’s decline on the same day it became legal tender in El Salvador. Such events usually push the price up, but not this time. 

XRP wasn’t as successful in recovering as Bitcoin was. It took 2 weeks to restore the uptrend. Although the XRP/USD pair hasn’t reached the highs seen at the beginning of September, the uptrend is in force. 

On November 9, Ripple announced the upcoming launch of a marketplace for financial firms. It will allow financial service companies to offer their clients an option to buy and sell cryptocurrencies. The start of the platform, which will be called Liquidity Hub, is scheduled for 2022. Firms’ customers will be able to use it to buy crypto assets from various sources. Although this news couldn’t cause XRP to appreciate, the actual launch may boost its price.   

The limited reaction to the news was caused by the ongoing SEC case. The court ordered the company to properly search for and turn over the video and audio recordings of its internal meetings.

Now the XRP rate depends on rumors, news, and the general market situation. If the crypto market continues to grow and Ripple wins the court case, it will see significant gains. But by investing in XRP, you are buying an increased risk of uncertainty. We would recommend refraining from buying until the situation with the court is cleared up.

Trading is another matter. XRP’s rate is sensitive to any news and rumors, and it shows significant movement (both growth and decline) after such. By trading, you can bet on the growth of XRP but also on its fall.

XRP Price Prediction for 2022 by Crypto Experts