Written by Chris MacDonald at The Motley Fool Canada
Cryptocurrencies have been plummeting this year, and the month of May has particularly witnessed steep plunges. Indeed, it’s fair to say that these digital tokens have a much higher risk profile than their equity peers. Top cryptos such as XRP (CRYPTO:XRP) have not been immune to these moves.
That said, there is also greater upside potential from the growth these projects provide. Those taking a bullish long-term view on blockchain technology have been right to invest in XRP in the past.
Accordingly, is XRP a token investors should consider right now? After all, this is a project with some hair.
Let’s dive into whether this large-cap token is one worth owning right now.
There’s certainly reason to be cautious
Let’s start with what has some investors troubled with XRP, shall we?
Back in 2020, the SEC sued Ripple, XRP’s parent company, alleging company insiders engaged in unregistered security sales. Obviously, this protracted brawl with regulators is not a good thing for long-term investors. Relative to other mega-cap tokens, XRP has underperformed since this time.
That said, XRP has retained its value as a top-six cryptocurrency by market capitalization over this period. Investor caution is certainly present with XRP, but bulls remain seemingly undeterred.
Of course, should the SEC prevail in its case against Ripple, XRP could be in for some pain. This is a reality bulls realize owning this token. Expectations right now are that a resolution is likely at some point this year. Various rounds of discovery and examination have revealed some interesting factoids the market has viewed positively. Thus, it appears the market is pricing in some sort of victory for Ripple and XRP right now.
I’m not certain about any outcome. A lawsuit from the SEC usually ends in some sort of settlement at some point. Time will tell how the court views this case, but I don’t think it’s so open and shut. This is simply a risk investors need to consider with this token.
There are some big reasons XRP is gaining attention
That said, there are reasons many bulls are looking past this ongoing saga. Beside the high-profile lawsuit, there are other factors driving demand for XRP tokens right now.
One of the interesting recent developments with this crypto network is the partnership between Ripple and QNB group. This partnership will see Ripple’s blockchain technology catered to more than 20 million customers globally. That’s some impressive adoption.
Notably, QNB has already successfully launched a corridor between QNB Finansbank (Turkey) and QNB Qatar on RippleNet, the global financial network technology of Ripple. This further led to an expansion in the Middle East operations of Ripple.
Recently, SBI Africa declared that its cross-border e-commerce web portal “SBI Motor Japan” will now accept XRP payments. SBI Africa is a wholly subsidiary of SBI Holdings based in Japan.
Like other major tokens, XRP is down significantly from its peak. Accordingly, investors bullish on crypto can certainly make an argument that this token could be worth a buy at these levels.
That said, XRP is a token I view as higher risk in nature due to its ongoing legal issues. Until these are resolved, I’ll remain on the sidelines. Until then, it will be fun to watch how this cryptocurrency performs from here.
The post Is XRP the Large-Cap Crytpocurrency to Own Right Now? appeared first on The Motley Fool Canada.
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Fool contributor Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.