This guide is for beginners that are looking to learn how to invest in Ripple, the third largest cryptocurrency. Below we are going to discuss how to create an account and other procedures that are necessary for one to buy XRP.
But before we get started you need to understand that Ripple is a global settlement network that makes it easy to transfer almost any currency to anyone around the world in seconds.
In doing this Ripple has managed to render the archaic system of sending money employed by the likes of Western Union and SWIFT obsolete.
The platform is focused on offering banks a more efficient and cost-effective method of sending payments in real time around the world. The platform focuses on the ‘internet of value.’ Their belief is based on the fact that money transfers should move as quickly as data does in this age of technology.
The procedure on how to invest in Ripple
Unlike large investors who can directly invest in Ripple, regular investors have to settle to invest in XRP. Ripple’s native currency took off in 2017 when its price jumped from under $0.01 to over $0.30 per coin. The surge had something to do with bank adoption and speculative interest.
Step 1: Get a Ripple (XRP) wallet
There are different types of XRP wallets. The vital thing to remember is that once you create one whether software or hardware, you will have to write down your security key and store it in a safe location.
The secret key allows a user to gain access to their wallet no matter what happens. It’s also important to note that these wallets operate the same way as Bitcoin wallets. For those who don’t know the differences between various wallets I recommend you check out this guide.
It’s recommendable to store your XRP in a hardware wallet which guarantees the best security. Also, to protect against low-level spam attacks, the ripple wallet should be funded with a minimum of at least 20 XRP in reserve.
However, when it comes to the most reliable Ripple wallets, Ledger Nano S is currently the only reliable hardware wallet that one can use to store XRP.
See a list of other suitable Ripple wallets here.
Step 2: Finding An Exchange
It is the second step on how to invest in Ripple. There are several options on how to buy XRP today. It can either be through fiat currency, or you can trade bitcoins for ripple on specific exchanges.
how to invest in Ripple via a trading fund
There are platforms like eToro that don’t give you actual access to your coins, and also it’s not possible to send the coins to other people. The only thing that is possible on the platform is to buy and sell XRP for fiat currency (i.e. Euros and Dollars etc.). It makes the platform good for speculation based on price only and its valid for those that live outside the US.
However, it’s important to note that if you use eToro, you don’t need an XRP wallet as they don’t supply you with actual coins. Also, virtual currencies can widely fluctuate in price, so they are not appropriate for all investors. A crypto investor is mostly on their own as trading cryptocurrencies are not supervised by any European Union regulatory framework. It’s also vital to note that your capital is at risk.
how to invest in Ripple using fiat currency
The best way for people that don’t already own bitcoin to buy XRP is through a credit card or a wire transfer.
Exchanges like CEX.io allows one to buy XRP using your credit card or wire transfer. CEX is a London based crypto exchange that has been around since 2013.
Another exchange is Coinmama that allows one to buy XRP with a debit card or a credit card. The company is a well-established broker that was launched in 2013.
It’s also possible for users to buy XRP through a wire transfer using Bitstamp. All a user needs is to sign up, and after following the KYC (Know Your Customer) procedure, they can quickly send USD via bank transfer or Euro via SEPA transfer. As soon as the transfer clears, a user can trade fiat currency for XRP directly on the exchange.
Users can also move money on the exchange using a credit card and also trade bitcoin directly for XRP.
Another exchange that supports XRP is GateHub. One has to sign up first and undertake the KYC process. The platform accepts SEPA transfers as well as bank transfers. The one drawback is that there is a $15 fee for bank transfers.
how to invest in Ripple by trading Bitcoin for XRP
It’s the easiest and fastest way to purchase XRP. One can buy BTC on Coinbase or any other exchange and then proceed to send the bitcoins to a platform that supports XRP. From here they can exchange the BTC to XRP.
Step 3: Withdraw XRP to your wallet
The final step on how to invest in Ripple is withdrawing your XRP to your wallet. It’s not recommendable to leave your XRP on the exchange where you bought them. It is because you don’t control the private keys for your coins; therefore, they are not actually yours.
So it’s advisable no matter where you got your coins from you should withdraw them to your own Ripple wallet where you have control over your private keys.