1 Reason Every Investor Should Know About XRP

Key Points

• XRP is viewed as one cryptocurrency and blockchain network that could disrupt the traditional payments space.

• What also makes XRP unique is its ties to Ripple, which is building financial solutions that bridge the gap between crypto and traditional finance.

• 10 stocks we like better than XRP ›

Cryptocurrencies are controversial. Some investors think they are the future, while others see a scam. The big ones like Bitcoin and Ethereum experience growing acceptance in the investment community and even on Wall Street. However, for the rest of the cryptoverse, the jury is still out.

One cryptocurrency that has captivated the market this year is the world's third-largest cryptocurrency, XRP (CRYPTO: XRP). XRP has been on a huge run since Donald Trump got elected president last November. Investors correctly assumed that Trump would install new leadership at the Securities and Exchange Commission (SEC) that would lead the agency to drop an appeal in a long-standing lawsuit against Ripple, the company behind XRP.

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Aside from the big gains that XRP has made this year, even if you are not interested in the token, there's one reason every investor should at least know about XRP and what the cryptocurrency is capable of.

Image source: Getty Images.

Crypto could disrupt payments, and XRP is well positioned

While cryptocurrencies haven't come close to replacing fiat currencies yet, crypto advocates believe there is still strong potential for blockchain technology to disrupt the traditional payments system. That's because people can transfer money quickly and affordably using crypto, as long as they have internet access.

XRP's network is strong from a technical perspective, able to process up to 1,500 transactions per second. It also operates in the Ripple ecosystem, which has its own stablecoin, a large prime broker, and is also working with traditional mainstream financial institutions.

Ripple's CEO Brad Garlinghouse thinks XRP could transform the way international payment transactions are completed and even take volume from the Society of Worldwide Interbank Financial Telecommunications (SWIFT). This messaging system enables financial institutions all over the world to send payment instructions to one another, facilitating international payment transactions.

Even if you have no plans to invest in crypto, people should stay up to date on changes in the payments system, which can impact their daily lives. Watching XRP and Ripple's progress is a good way to do this.

Should you invest $1,000 in XRP right now?

Before you buy stock in XRP, consider this:

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Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.