Ripple adds customers, increases price – XRP USD (Cryptocurrency: XRP-USD)

A long time ago; several years, in fact, a friend very tied to the world of technology has convinced me to be involved in cryptocurrencies. At the time, technology was nascent and, frankly, I had never heard of it. However, it was categorical that I was involved in Bitcoin (BTC-USD) and I insisted that I do it immediately. He never insists on making me do something in finance because I'm the one who works in finance. Along the way, that investment worked and I learned a few things. The same friend later told me to do the same with another rising currency: Ripple (XRP-USD). Without any hesitation, I did as ordered, but honestly, I never bothered to read the fine print. His first prediction worked notoriously; I had nothing to lose with the second, Ripple. I want to diversify my basket of cryptocurrencies, so in the last few months I feverishly read as many cryptocurrencies as I can. I like some. I love the others Ripple is one that I love very much, and it's not because I had a decent ride on my purchase. Also, my friend says he does not even bother with Bitcoin anymore and is going all-in with Ripple. However, I'm adding more XRPs to my cart and here are some of the reasons why.

XRPUSD Ripple

Acceptance is the key

Currently, and probably for the next two years, I will travel to Central and South America to "see the world" (I am now in Baja California). Both my personal financial institutions have provided me with debit cards on my accounts, however, they are both Mastercards. In America, they are so widely accepted that you never notice. Cross the border and suddenly start paying attention to these little things; I had problems with acceptance and now I have to pay attention to this.

Without unreasonably regurgitating the information on the Ripple Wikipedia page, I will select some relevant points relevant to this discussion. First of all, Ripple has a purpose as well as being a generic cryptocurrency. Simplistically, the main purpose is for transactions as a settlement system. It also works as a currency exchange, something that after 27 years of trading currencies are very interested. There are also aspects of Ripple remittance that I like. About $ 500 billion has been sent through the money transfer centers around the world that Ripple is building the platform to become a partner.

Ripple is increasingly accepted by some of the major financial companies (UBS, Santander and UniCredit and a partnership with ZipZap, a direct threat to Western Union). And today, at the Ripple Swell conference, companies announced that 3 companies are using XRP for real payments: MercuryFX, Cuallixand Catalyst Corporate Credit Union. The company, Ripple, is expanding and pushing cryptocurrency, XRP, into wider use. This is the key to the success of cryptocurrency.

The greater the use of the currency, the greater will be the success. The costs of remittance of money through the Ripple platform are negligible, while other cryptocurrencies, like Bitcoin, are more expensive. If more companies benefit from cryptocurrency, then other companies will have to add usage to the list of services to meet their customers' needs. It almost becomes an avalanche effect, where a scale at the top of the mountain collects more and more as it rolls down the hill. The financial world is embracing the idea of ​​the blockchain – I am aware that Ripple does not use blockchain, but, instead, the general accounting system. Ripple does something slightly different than Bitcoin and other cryptocurrencies via its distributed registry system:

Ripple is based on a shared public ledger, the XRP Ledger, which uses a consensus process that allows payments, exchanges and remittances in a distributed process. The network can work without the Ripple company; among its validators there are companies, internet service providers and the Massachusetts Institute of Technology. The ledger uses the decentralized native cryptocurrency known as XRP, which in September 2018 was the third largest currency by market capitalization.

As more and more companies adopt these technologies and more and more financial companies take Ripple as the most accepted cryptocurrency, then the point of no return can be achieved and the XRP will take the bright side.

What is the difference between Ripple and XRP?

Big question and something everyone needs to have clarified. Here is a brief breakdown: XRP is a cryptocurrency, a currency. Ripple is the software company that created the currency and, in fact, the source for promoting cryptocurrency. The company is building currency exchange software, xRipple, which banks are using. Here is a further, brief, subdivision of the difference between Ripple, the company and XRP the cryptocurrency, via the company's website – Ripple:

The volume speaks loudly

The trade volume of XRP is an interesting thing. First of all, to use the cryptocurrency, it is necessary to buy the cryptocurrency. This is where exchanges come into play. So you can actively evaluate the cryptocurrency on various exchanges. I could care less about market capitalization; it is absurd to equate capitalization with success. For me, success is denoted by use. But when it comes to the volume traded on the stock exchanges, XRP already occupies the first place on different platforms. What I find most interesting is that the volume is equated with the number of coins exchanged multiplied by the dollar value of each currency. Following are the first six volumes listed on CoinMarketCapper the Binance system:

Here's what I find interesting. The price of XRP is ~ $ 0.58 compared to the price of BTC ~ $ 6,600. If you divide each volume by the value of the currency, see how much XRP is used more than BTC: in this case, 262 million coins were exchanged in 24 hours with XRP against 21,045 Bitcoin coins traded. In a sense, this is significant because of the amount of information that needs to be processed by the system and how much the systems can handle the volume. In other aspects, it does not mean much. For example, if I give you $ 100.00 dollars for a service that charges is important if I give you 5 – $ 20.00 bills or 1 – $ 100.00? Not exactly. But, once again, as regards cryptocurrencies, it does so in the sense that each currency that is processed requires computer time via servers or miners, respectively.

In a linear view from that angle, this larger volume of XRP will diminish in the future if the value of the coin increases naturally. But as more and more companies take the currency and use it to transfer money through remittances or cross-border transactions, this will increase prices as supply is limited. This continuous acceptance and the continuous increase in volume is what I look at as a driving force of cryptocurrencies and, in particular, Ripple XRP.

Downside risks

Options negotiation. Trade cryptocurrency options. I do it via Deribit. The problem is that Deribit only allows to exchange BTC options; they did not open to more cryptocurrencies. Yet.

My trading style is usually delta-neutral. I mostly trade by placing a long-serving spot and then buying it puts at-the-money but in a 1: 2 ratio, spot: options. In this way, if the market moves down, even if I'm losing money in my place, I have 2 times more put options, so it earns twice as much. At break-even point, or at a slightly more profitable level, I add additional positions or profit.

But, as I said, Deribit does not allow options on XRP. This means that I have to take positions naked and I hope I have understood correctly. My strategy will be to buy a dive that is superior to the current 10-day standard deviation from the previous close. So, I hope to get half profits. I will continue to make this exchange over many weeks and months. I do not exchange technical analysis and I think it is absolutely useless, to put it in a polite way. But there are a lot of individuals who trade from a purely technical basis. So, as a result, I have to pay attention to the technical data simply because they make so many traders.

To expand the way this trade will be performed, I am very quantitative. With the standard deviation of 10 days – using the absolute standard deviation, sometimes market players sometimes lack – I can determine if a price is outside the normal. If XRP moves lower, abnormally, I will execute a purchase order with a take profit above my voice. The take profit will be executed using the midpoint of the 10 day high / low interval (excluding the external move). This is highly quantitative and systematic. I will become a computer and I will continue to do it this way.

My thought is that on a regular basis, the cryptocurrency will tend to rise. This is risky Again, I usually sell options where I always know my downside and I have a general idea of ​​what my advantage might be. Now, I have no idea. But, if I maintain the exact same position size, any commercial operation will not affect the entirety of all my operations; it is only when we increase the size that each trade can overcome others.

I believe in these currencies. In the long run, I think cryptocurrencies are the future. I also believe that most of these currencies will tend to higher prices, especially the most widely adopted currencies. So, I believe that my strategy, over many, many months, will be profitable.

Revelation: We are / are long XRP-USD.

I wrote this article alone, and expresses my opinions. I'm not getting any compensation for this (other than Seeking Alpha). I have no business relationship with any company whose actions are mentioned in this article.