Is XRP a Millionaire-Maker Cryptocurrency?

Most people would love to make millions in financial markets. And if you are on the hunt for life-changing returns, the cryptocurrency sector is one of the best places to put your money because of its explosive growth potential and exciting catalysts for continued long-term expansion.

With XRP's (CRYPTO: XRP) price up by a whopping 42,573% since its launch more than a decade ago, the easy money has already been made. Investors should expect slower (but potentially more consistent) growth in the years ahead. Let's discuss what the future may bring.

Cryptocurrency done right?

The global cryptocurrency sector is worth a whopping $3.5 trillion, which is pretty impressive for an asset class once dismissed as a fad. But despite their growing appeal with investors, digital assets have not meaningfully integrated into everyday life. Most people don't shop with Bitcoin or pay taxes in Ethereum, mainly because of obstacles like regulatory uncertainty, high transaction fees, network congestion, and a lack of trust in blockchain networks relative to the alternatives.

These problems won't go away anytime soon. But XRP has made impressive efforts to improve upon the shortcomings of its predecessors. With a transaction capacity of 1,500 per second, it runs laps around Bitcoin, which can only handle seven. The network also boasts an extremely low fee of just 0.00001 XRP, which is a fraction of a cent.

XRP was designed to facilitate international payments by serving as a bridge currency. For example, if someone wants to send U.S. dollars to Japan, they could use their dollars to buy XRP and use that XRP to buy yen, bypassing time-consuming and expensive intermediaries. And while newer blockchains can also serve a similar role, XRP stands out because of its early-mover advantage and active development team, which consistently adds new features to the blockchain's ecosystem.

RippleLabs is a positive catalyst

Although blockchain projects often pride themselves on their decentralization and anonymous development (the true identity of Bitcoin's creator remains unknown), XRP has taken a much more transparent approach. The blockchain's development team, Ripple Labs, continues to play a highly visible role in the network it created. Most recently, this has involved defending against a Securities and Exchange Commission (SEC) lawsuit that sought to regulate its XRP sales to retail and institutional investors under securities law.

Ripple Labs won a partial victory when it was determined that its sales to retail investors did not fall under securities law (although institutional sales still do). This type of regulatory clarity is beneficial for XRP's growth because it makes risk-adverse organizations more willing to buy or transact with XRP while also opening the door for the approval of financial products like spot exchange-traded funds (ETFs).

Image source: Getty Images.

Ripple Labs promotes XRP through a network called RippleNet, designed to connect banks, payment providers, and financial institutions globally. And it boasts more than 100 partners, including Santander USA and the Canadian Imperial Bank of Commerce. In July, the organization took things a step further by applying for a U.S. banking charter of its own. This move will further bolster XRP's credibility in mainstream finance.

Securing a banking charter would also let Ripple Labs facilitate faster transaction settlement and reduce reliance on intermediaries -- key advantages as it continues promoting XRP's adoption in cross-border payments.

Is XRP a millionaire-maker?

XRP has a market cap of $138 billion, making it the fourth-largest cryptocurrency in the world. Naturally, this means the easy money has probably already been made. Yet, XRP still has what it takes to outperform the market because of its strong brand and active development team, helping it overcome regulatory hurdles. Investors should consider adding it to their diversified portfolios.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.