How To Buy XRP?

XRP resides among the top ten cryptocurrencies in market capitalization. Because of this, XRP trading is quite liquid and available at all the major crypto exchanges in the world such as Binance, Huobi, Bitstamp, Bitfinex, Bithump or KuCoin. Interestingly enough, XRP is currently not traded on Coinbase as the company has suspended XRP after the SEC’s lawsuit in December 2020 and has not relisted XRP since. As XRP is a token that is based on its own distributed ledger (called XRPL), XRP cannot be bought through decentralized exchanges like Uniswap, SushiSwap or 1inch.

Why Buy xrp?

As we have seen in our piece “What is Ripple (XRP)”, the XRP token might not be seen as a pure cryptoasset like BTC or ETH. Nevertheless XRP is still listed on coinmarketcap, a website that provides information about all the different cryptocurrencies out there. So what possible reason could there be to still consider XRP in a cryptocurrency portfolio? As Ripple is focused on making the entire cross-boarder and international payment landscape more efficient, it might make sense to keep an eye on XRP. Because as of now, it is not entirely clear whether these developments will be instigated by completely open blockchains like Bitcoin or Ethereum or a hybrid solution like Ripple. Due to this uncertainty, some people consider XRP as a hedge if cryptoassets like bitcoin or ether won’t ever be integrated into the traditional financial system and used by banks on a large scale.

Amusingly, one could argue that XRP is the bankers’ cryptocurrency. Judging by anecdotal evidence, XRP is particularly popular among bankers. And this comes as no surprise, since Ripple the company was ranked the second most valuable US Fintech startup by Forbes Magazine, leaving behind financial darlings like Coinbase or Robinhood. Additionally, the company is also very well financed as it was able to secure a lot of VC funding. 

Since the XRP ledger is a permissioned ledger, proponents make the case that the cryptocurrency could become an important source to facilitate regulated, international payments in the future. After all, this is really what Ripple is trying to achieve. And if they are succeeding in facilitating and optimizing traditional payments and the XRP token will be used in liquidity swaps with all sorts of fiat currencies, XRP will certainly benefit from this. To find out more about Ripple, read our comprehensive guide. 

Read the guide: What is Ripple (XRP)?

Where to buy XRP

The most prominent and most liquid places to trade XRP against other cryptocurrency as well as fiat money are Binance, Huobi, Bitstamp, Bitfinex, Bithump or KuCoin. In order to buy XRP on one of these exchanges, an account is needed that requires basic identification, and if larger amounts are traded a complete verification. 

The process is straightforward and similar to that of an online brokerage. You will be asked to provide your information such as name, address, an official public document (passport) and a proof of address (utility bill). Usually, this process takes only a couple of minutes.

Once you have the documents submitted, it will take 1-2 business days for your account to be verified and fully operational. Be sure to enable 2-factor authorization and other safety features (such as delayed withdrawals) when opening the account. This ensures that unauthorized access to your account and funds is significantly more difficult.

As we already mentioned, XRP resides on its own distributed ledger (XRPL). For this reason, the actual XRP token cannot be bought on decentralized exchanges within the Ethereum ecosystem. What these exchanges offer though, is a synthetic version of XRP called sXRP. This represents tokenized XRP on the Ethereum blockchain, a token that tracks the price of XRP as the underlying asset of sXRP.

In contrast to other coins like ETH, DOT or ADA, XRP cannot be staked as its ledger is not based on any Proof-of-Stake (PoS) algorithm. Whoever wants to earn yield on their XRP can use crypto lending services. The most popular apps offering such services are Celsius, Nexo or YouHodler. The latter offers up to 4.5% annual yield if you deposit XRP with them. By doing this, XRP is lent out by these services in order to generate a yield. This obviously comes with financial risk as your coins are being put to work by a borrower, who is at the risk of potential default. 

How to safely secure XRP

XRP can be held on the very exchange that it was bought. Once the XRP are bought, they can conveniently be left in the exchange account that one controls, no extra transaction to an external wallet is needed. Of course, this bears a counterparty- risk. Should the exchange be hacked, go bankrupt or be fraudulent, XRP tokens might be lost.

Whoever does not want to be exposed to this risk can alternatively store XRP tokens on a personal wallet. Because XRP is a digital bearer instrument just like other cryptocurrencies, this option of taking self-custody is available for everyone. The most popular software wallets compatible with XRP are Atomic Wallet, Guarda Wallet or Edge Wallet. All of these wallets are available for iOS as well as Android smartphones. If greater security to store one’s XRP is sought and needed, hardware wallet providers like Ledger or Trezor are the options to use. 

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RELATED CATEGORIES: Crypto, XRP