How To Buy XRP (Ripple)

1. Choose a crypto exchange or broker

Both a crypto exchange and a crypto broker can help you buy XRP, but the two are slightly different.

An exchange is a platform on which buyers and sellers can trade cryptocurrencies. A broker is an interface that interacts with exchanges on your behalf.

Some exchanges only deal in crypto, so if you’re new to investing and need to buy crypto using fiat currency (AUD in Australia), make sure you choose an exchange that accepts it.

If you choose a broker instead, be aware of its rules around moving your assets off a brokerage platform. Some brokers don’t allow you to move your holdings out of your account, which is typically a red flag in the eyes of most crypto investors. Moving crypto assets into a private wallet, especially a hardware wallet, enables investors to adopt security best practices and the self-custody ethos strongly advocated among experienced hands. 

2. Choose a payment method

Most exchanges let you add funds to your account from your credit or debit card, bank account, crypto wallet or other payment service. Transaction fees may apply, and your payment method may affect the amount you’ll pay.

When you use a credit card, the card issuer treats it as a cash advance, which is subject to a higher rate of interest than a normal purchase.

3. Buy your XRP

Within your chosen exchange, head to the XRP market and enter the amount you would like to purchase. Most exchanges allow you to use either a market order or a limit order.

A market order will execute immediately, buying your XRP at the market rate when you press buy. A limit order works slightly differently, allowing you to choose the price at which you want to buy. You could set the price lower than the market price and hope XRP dips down to fill your order.

It is important to note that if the price you set the limit order at doesn’t get hit, your order could sit dormant until it expires. In this case, you will not buy any XRP and will keep your initial capital.

4. Select secure storage

Unlike a bank account holding fiat currency, cryptocurrencies like XRP aren’t protected by the Financial Claims Scheme (FCS). This means you would not be immediately entitled to reimbursement if your XRP were stolen, you lost your access codes, or the exchange or broker went bust.

A broker may not give you a choice about where your XRP is stored, but while an exchange may provide an integrated crypto wallet, you’re free to store it in wallets elsewhere—whether ‘hot’ or ‘cold’.

Hot wallets are stored online, making them more convenient but also more exposed to hackers.

Cold wallets are external storage devices such as hard drives or solid-state drives. They’re arguably more secure, but if you were to lose your own access codes, you may never be able to access your assets.

Whichever you choose, you may be charged a fee for exporting your XRP to an external wallet.

When considering an investment in XRP, it is essential to understand the project’s background and current situation to assess whether it would fit into your portfolio properly. Ripple stands out in the crypto world as a project that operates in both the traditional financial system and the new blockchain technology paradigm. 

Ripple’s payments system aims to create an efficient and cost-effective alternative to the existing SWIFT banking system by using blockchain technology for value transfer. However, the company is currently entangled in a legal battle with the US Securities and Exchange Commission (SEC), which has impacted the price of XRP for several years.

While the case has had some positive outcomes so far, it is yet to be completed, and the outcome for Ripple is yet to be seen. Many experts highlight that, depending on what happens, there is both a bull and bear case scenario for Ripple. Experts will point to XRP’s value appreciation if the case is resolved positively. However, if the case is not resolved in Ripple’s favour, it could be all over for XRP.

Either way, the uncertainty surrounding its legal status, combined with the possibility of a decline in interest once the legal narrative no longer dominates headlines, could lead to decreased demand and a fall in price. Moreover, concerns about the utility and necessity of XRP within Ripple’s payment system raise questions about its fundamental value proposition.

Ultimately, investing in XRP requires careful consideration. Prospective investors should weigh everything against their personal risk tolerance and investment objectives.

Buying shares in a company that either directly or indirectly operates in or adjacent to the blockchain industry can give you exposure to the movements of cryptocurrency. These companies can range from crypto exchanges to Bitcoin mining operations to companies involved in the tech behind digital assets. 

Nvidia (NVDA), for example, is a manufacturer of graphics processing units that cryptocurrency miners use. Coinbase (COIN) is a popular crypto exchange that allows users to buy, sell and trade cryptocurrencies.

There are many publicly listed companies that have some connection to the digital asset sector, so there are many options out there for investors seeking the more familiar route of investing via the stock market. There are also now crypto exchange-traded funds (ETFs) that track the prices of cryptocurrencies directly. For example, BTC and Ether ETFs are listed on Cboe Australia, which investors can access via their share trading platform or broker. 

Whatever way you decide to invest in cryptocurrencies, be sure to do your own research and consider whether cryptocurrencies or crypto-adjacent companies are the right investment for you. It is crucial to consider your circumstances and goals before moving forward, and if you are unsure about anything, speak to a professional financial advisor. 

Note: Nvidia and Coinbase are used for illustrative purposes only. This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class.  Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.