XRP Trading Guide: What Moves Ripple XRP’s Price?

Ripple XRP (XRPUSD) is the currency accepted across Ripple's platforms, including their global money transfer system, Ripple Net.

This coin is used as a store of value recognised amongst its hundreds of global gateways, allowing people to convert money from local fiat currency to XRP and back at any time. This established global customer base gives XRP active use cases that traders can look to for relevancy.

Given this cryptocurrency's importance, traders may want to familiarise themselves with the factors that could shift XRP prices and how they can trade rising and falling XRP prices, covered in this article:

TL;DR

• Factors like availability, trader sentiment, use cases, and regulatory changes can affect Ripple XRP prices.
• XRP can be traded directly via exchanges or CFDs (Contract for Differences), allowing traders to speculate on its price movements without owning the coin.
• Its high volatility offers the potential for both high gains and significant risks.

Factors that influence XRP Price

Availability

To increase the value of each coin, a small amount of XRP is destroyed with each transaction. This means that there is continuously less XRP available as time goes on.

A diminishing supply is meant to balance or increase demand, potentially raising the desirability of this cryptocurrency and the price along with it. When XRP was initiated, 100 billion coins were created. 80 billion were made available for purchase and 20 billion were split amongst the founders. With each transaction, a small amount of XRP is 'burned' making the coin increasingly limited.

Use Cases

XRP, while limited to the Ripple Labs network, has multiple use cases, such as smart contracts, international money transfers, in-app purchases, and more. Having built-in uses and easy adoption makes for XRP to be potentially more desirable to a larger audience, should use cases continue to grow.

An example of this would be if XRP is accepted by enough institutions that more people feel it is worthwhile for them to hold the currency. If enough people need XRP and trade it regularly, the rules of supply and demand may push the valuation of each coin higher.

Trader Sentiment

Trader sentiment can trade XRP in the marketplace, similar to how Bitcoin (BTCUSD), Ethereum, or other cryptocurrencies are traded.
Just like with any share, commodity, or other instrument, an increase in the number of individuals in the market who are buying has the potential to raise the price. As individuals who are holding XRP see that demand is increasing relative to supply, they may choose to raise the price to whatever they can get in the market.

Regulations

Due to their high volatility, cryptocurrencies are often known for being some of the most regulatory-scrutinised market instruments. As such, any changes in regulations that are pro or anti-crypto can shift XRP prices. For example, when Donald Trump was re-elected US President in November 2024, cryptocurrencies soared since he is known for his pro-crypto policies.

How to Trade Ripple XRP

Ripple XRP has a practical use for businesses that perform international transactions. Some traders feel that this aspect will keep XRP in demand and increase its value over time, while others feel that people convert into, and then out of, XRP too quickly for it to hold value.

Here are some of the ways to trade Ripple XRP:

Buy Ripple XRP Directly

Individuals can purchase XPR coins directly from a crypto marketplace/crypto exchange. They will then be fully exposed to the coins' fluctuations and extreme volatility.

Some traders may end up holding on to the currency for a long time, as they are unable to use this crypto coin anywhere but in the Ripple network, unless they find a vendor who is willing to accept it as a form of payment.

Trade Ripple XRP With CFDs

With Plus500, traders can open CFD positions on XRP without needing to purchase the underlying asset. The Plus500 Platform offers clear charts, tools, and rapid executions without needing to open a crypto-specific wallet.

Similar to trading other cryptocurrencies like Bitcoin (BTC/USD) or Ethereum (ETH/USD), traders can gain exposure to this cryptocurrency by going either long or short on the instrument. This means they can recognise potential gains or losses if the value of XRP moves up or down.

Ripple XRP CFD Trading Example

For example, a trader opens a 'Buy' position on XRP. This means that they are speculating that the price of XRP will rise. The trader can recognise a profit based on the difference between their XRP CFD opening price and the XRP CFD closing price. However, if the price of the currency drops, they will have incurred a loss.

On the other hand, if the trader wants to speculate that the price will drop, they can open a 'Sell' position, recognising gains if the price of the coin drops or a loss if it rises.

Traders should be aware that while leverage allows for greater exposure to an instrument's movement, it also increases a trader's exposure and risk.

Crypto 10 Index

Indices are a single instrument comprising a collective of other relevant instruments. Plus500 offers the Crypto10 (Crypto10) Index* CFD so traders can follow the market fluctuations of leading coins as a single unit.

With Plus500, traders can access leveraged trades, giving them a new way to trade on today's top crypto movers.

Some traders speculate that XRP is a worthwhile investment since it has practical use cases for international trade.

Trading CFDs on cryptocurrencies, including XRP, offers traders the flexibility to open and close positions without having to own the underlying asset and without needing to manage a crypto wallet. While some traders may prefer opening positions on cryptocurrencies over other instruments, it is important to remain aware that they are highly volatile instruments. Traders should remain aware of market movements while positions are open.

Conclusion

Ripple XRP is a cryptocurrency with practical use cases in global transactions and a finite supply, making it potentially valuable. Factors like adoption, trader sentiment, and regulatory changes can influence its price. While trading XRP offers opportunities, its high volatility presents both risks and rewards. Traders should understand these dynamics and stay aware of market fluctuations when speculating on XRP's price.

*Availability subject to operator