AMA - What Do You Think of Crypto XRP?

The Real Estate Espresso Podcast

AMA – What Do You Think of Crypto XRP?

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AMA – What Do You Think of Crypto XRP?

Welcome to the Real Estate Espresso Podcast, your morning touch base on what’s new in the world of real estate investing. I’m your host, Victor Menasce. Today’s episode is another AAA episode. That’s Ask Me Anything. I love to answer your questions. If you have a question of broad interest, feel free to send it in. Send your queries to victor at victorjm.com.

Today’s question comes from Joseph, who writes, “I have a friend who is bullish on this crypto called XRP. There’s talk that this will become the new way of doing business and getting invested in it sooner rather than later is a no-brainer. What are your thoughts? I view crypto as a hedge, similar to holding physical precious metals. If things go south, it might be good to have some. Watching crypto during the pandemic, it almost seems like a get-rich-quick scheme. One variant gets hyped up and then falls, until the next new one arises. I’m open to being wrong here but am curious about your thoughts. Is any of the XRP hype true?”

Well Joseph, this is a great question. In fact, I have been examining XRP over the past few days, even before your question arrived in my email inbox. XRP was developed by Ripple with an aim to serve useful purposes in transaction management, specifically international banking transfers. The price of an XRP token, as of this writing at the beginning of November, is comparatively low at 2.58 – according to a recent Reuters article, we’ve seen a 5x multiple in about a month.

XRP was not launched intending to be a financial asset, unlike Bitcoin and Ethereum which are currently being traded. XRP is optimized for use in the banking system for international transactions. As of now, around 100 banks worldwide utilize XRP for international transfers. Some of the more significant players include the U.S. Division of Santander Bank and the Canadian Imperial Bank of Commerce.

The merits of XRP shine in its transaction cost, which is much lower than its counterparts. It uses 61,000 times less energy to complete a transaction compared with Bitcoin. That is a massive saving. An XRP transaction takes between 3 to 5 seconds to complete across the network, compared with 10 minutes for Bitcoin.

In a positive development for Ripple, U.S. District Judge Annelisa Torres has ruled that the sale of XRP tokens by Ripple is not an offer of investment contracts. This ruling came after Ripple spent a significant amount of capital defending the claim that the XRP was a security. As the case between the SEC and Ripple remains active, with the SEC having until January to submit additional filings. We’ll have to wait to know for certain what XRP is – a security or not.

President Trump seems to be in favor of cryptocurrencies. This might lead to greater acceptance within governmental strata. However, in the short term, we can expect rampant speculation in XRP, which is likely to continue for the next several weeks, at least until the SCC ruling. On a personal note, I will probably purchase some quantity of XRP, more as a learning exercise than anything else.

Thank you, Joseph, for a fantastic question. For the listeners at home, have an excellent rest of your day. Go make some great things happen, and we’ll talk again tomorrow.

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