Things to Know About Ripple Exchange & Trading
Ripple is a cryptocurrency that is designed for enterprises and it is fast becoming an outstanding coin. Although it utilizes consensus mechanisms and validating servers, it isn’t a blockchain. This article is aimed at giving you information on the things to know about ripple exchange (XRP) and trading.
History of Ripple
Originally, XRP was created as a solution for payments based on blockchain technology. Its aim was to resolve issues that affected digital systems of payment. It satisfied the universal quest for a platform that would facilitate payments across borders without attracting delays and high costs as witnessed in the transfer of other currencies. You may want to check out https://www.bbc.com/news/av/business-38932854 to find out how blockchain technology works.
Some big names when it comes to international banking such as Standard Chartered, Santander, and American Express have embraced the use of XRP. They utilize it in cross-border transactions.
Ripple has potentials for growth because it aims at creating a unified currency to support different transactions. Considering that big financial institutions are using the platform, it signifies that it is meeting a need around the payment ecosystem.
Transactions on ripple are faster than several cryptocurrency transactions. If you are buying a physical currency, it will take some seconds instead of hours or even days.
How You Can Trade Ripple
A lot of people are already using the platform for international payments. However, if you want to trade ripple every day from your wallet, it may be cumbersome. But you can leverage on the volatility of price to trade using CFDs (Contracts for Difference).
XRP has real-world currency value, and it can appreciate and depreciate with time. Here are ways to trade it:
- Leverage – trading with a little initial investment
- Volatility – responding faster to price change without even owning XRP
- No ownership – here, you do not need to have a wallet. Just leverage on the price volatility
You can trade the coin at any time because it is not dependent on when a certain market opens. But you have to know that depending on leverage when trading implies that you could be exposed to price fluctuations. Ensure to place stop losses to stay protected from a sudden reversal in prices. It will also help you to know your overall exposure to XRP prices.
Trading vs Buying XRP
When you trade the coin using a Contract for Difference (CFD), you can react promptly to changes in price. You could also leverage a short time of volatility. And you do not have to own the coin to trade at its current price.
On the other hand, buying the coin involves using a special cryptocurrency platform as well as a wallet. This is where you will store the currency.
Is It Risky to Trade Ripple?
Although the volatility of the market presents different opportunities to sellers, it could be risky. Whether you are selling or buying the coin, it involves some measure of risk because:
- It has a high rate of volatility
- Sharp fluctuations in price are expected
- Trading based on leverage can increase both your losses and profits
You may want to watch this video to get strategies for trading XRP.
Factors Impacting the Cryptocurrency
Initially, people wondered how things would play out if the big financial institutions in the platform dumped a big sum of the coin in the market. Due to this concern, the platform has stored smart contracts to a tune of around fifty-five million. This will serve as a reserve for the currency. They are currently being pushed to the public at a rate of one million per month.
The process mimics the mining effect of other cryptocurrencies. However, since XRP isn’t a cryptocurrency, it does not rely on mining for sustainability. It is a platform for payments.
In this article, we have discussed the history of ripple, how to trade, and the factors impacting the currency. We cannot say for sure what will happen to it in the near future. However, learning how to trade the coin involves absorbing as much history and data about the currency as possible. This will ensure that the strategies you choose to use when trading does not backfire.