Updated: May 1, 2021
This post reflects my opinion on XRP from Thursday, April 2nd, 2021. It does not constitute as financial advice.
Cryptocurrencies today carry a lot of hype, and that's not to say they don't carry any value. The biggest fear for Bitcoin holders has been its potential threat to the US dollar. Bitcoin holders fear that the Federal Reserve, the central bank of the United States, will attack it in some way as to crush it out of existence.
With the recent news, this doesn't seem to be the case. Federal Reserve Chair Jerome Powell has been clear- Bitcoin is not seen as a threat to the US dollar. It's more of a store of value. It competes with gold, not the US dollar. Positive news for Bitcoin, but what does that mean for XRP?
Is XRP a threat to the US Dollar?
With the Fed shifting to digital currencies, it only makes sense that they should adopt a platform that is already useful, rather than creating one from scratch. Otherwise, the Fed would be lagging behind the competition, and the world may shift to other digital currencies.
Interestingly, it seems like Ripple Coin (XRP) is their choice. Keyword: seems.
Ripple has seen an attack by the SEC. The Security and Exchange Commission opened a lawsuit against Ripple. They want to classify XRP as a security. Why is that? Why are they so adamant about classifying $XRP as a security? It seems interesting that the SEC hasn't gone after any other cryptocurrencies. I think it's due to XRP not being "fully" decentralized. It's only more of a reason the Fed has interest- after all, they are the central bank of the USA.
The US Dollar is classified as a security. If the SEC can win this lawsuit and XRP is considered a security, then they can essentially set the same rules and regulations on XRP that they have on the US dollar. This means if the Fed decides to use XRP's platform, it will substantially increase the value of XRP long term. In the short term, XRP holders may think that a loss in the lawsuit is a bearish sentiment- I think opposite. Sure, we'll see a major dump on the initial news, but if the Fed can use XRP, the world will shift to using XRP as the global currency, similar to how the US dollar is used today.
Other interesting things to take notice
Bank of America owns XRP and has partnered with the platform.
The Fed has partnered with an XRP partner. It almost seems like the Federal Reserve wants to adopt it, but they just want to ensure that it can have the same protections in place that the US dollar will have.
I think these actions have revealed a major play regarding cryptocurrency. The real threat to the US dollar isn't Bitcoin- it's XRP. Why?
The technology behind XRP is deflationary in nature, transfers cash almost instantly, and can establish a global currency. Millions of dollars can be transferred in seconds. Our world leaders have made a dedicated push for a globalism, therefore its possibility of becoming a global currency can't be ignored.
The cryptocurrency can also be integrated with other technologies. The Japanese Central Bank has already committed to using XRP and it only makes sense for the Fed to commit shortly as well.
Elon Musk has tweeted, in coded language, to buy XRP.
Since that tweet, XRP has tripled in value.
He presented it in this fashion to prevent a lawsuit from the SEC. This is very important because Musk has a good connection with Jerome Powell, Chairman of the Federal Reserve. In fact, only a few months before Tesla's short squeeze, he was found meeting with Mr. Powell at Bezos's mansion. https://www.dailymail.co.uk/news/article-7931191/Jeff-Bezos-throws-lavish-party-new-Washington-DC-mansion.html
Rumors from those who were there say Powell and Musk had a somewhat lengthy conversation.
Consensus: XRP is close to being the next global currency. It will be worth trillions upon trillions of dollars one day. If the SEC labels it a security, we may see XRP at $10K some day.
This does not constitute as financial advice. It's just a very high conviction hold.