Three problems that scare investors away from Ripple

Although Ripple is “a good investment right now,” according to independent agency Weiss Ratings, XRP could struggle in the long term.

Recall that the independent rating agency Weiss Ratings has recently begun rating cryptocurrencies. While BTC has received widespread attention until recently, it had a low 3+ rating (now changed to a 4-), the agency also rates most altcoins, helping investors choose cryptocurrencies with the highest potential and those to stay away from. Weiss recently published an article on their website covering the third most popular digital currency, XRP, which currently has a market capitalization of $28 billion.

“In the short term, Ripple is a good investment,” writes Juan M. Villaverde, an editor at Weiss Ratings who has covered cryptocurrencies since 2012. However, he goes on to write: “Sometimes it takes aback when I think about the owners of XRP who are seriously planning to benefit financially in the long term.”

Two dilemmas for Ripple’s XRP token

Villaverde notes that Ripple traders may continue to make good profits in the near term, but investors who view the token as a long-term investment should think about two big ones. dilemmas.

Firstly, to a large extent the viability of Ripple depends on transactions with banks and financial institutions. The company is simply an intermediary used to convert fiat to XRP and then back to fiat using the Ripple protocol, which helps banks reduce the cost and duration of transactions. Villaverde notes, "Every traditional currency will soon have a digital counterpart. This process, called tokenization, will eliminate the need for XRP. In essence, Ripple has started a countdown to self-destruct by acting as a cryptocurrency demo for banks."

In other words, investors with FOMO who are buying up XRP after every announcement about the new partner of Ripple, they risk ending up with empty wallets..

Secondly, since Ripple is not a public company - XRP tokens are not shares - cryptocurrency owners do not have the right to claim a potential share of the company's profits. 

... and one more problem.

Perhaps the main problem that Ripple faces is that it is centralized in its structure, which makes it extremely vulnerable to regulatory suppression and bans. Villaverde says: "It would take much longer to ban Bitcoin or any other decentralized currency."

"Ripple is going the way of a traditional financial institution, highly dependent on governments and supranational institutions. Completely eliminating XRP is a piece of cake for such authorities."

You don't need to be an expert in financial analytics to understand what will happen to the price of the XRP token in such a situation. case.

Thus, even despite the fact that SWIFT technology is still significantly inferior to the Ripple protocol, XRP simply will not be needed, because supranational authorities and governments will issue - and some are already issuing - their own tokens to maintain complete control of financial and monetary systems.

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