Ripple Trading: A Beginners Guide With Regulated Brokers

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Risk Warning: Your Capital is at Risk.

If you have a basic understanding of what Ripple is, you may be interested in trading it. If this is the case, you’re in the right place.

We explore some reasons why or why you may not want to trade Ripple, followed by a list of regulated broker recommendations.

If you want to own Ripple instead of trading it as a derivatives instrument like Ripple options or CFDs, you can see our list of exchanges where you can buy it outright.

Should I Trade Ripple?

We explored some of Ripple’s features and position in the market to come up with some reasons you may or may not want to speculate on price movements.

3 Reasons You Might Want To Trade Ripple

  1. Full Payment System Platform
  2. B2B Focused Technology
  3. Instant Interbank Settlement

Full Payment System Platform

Unlike most cryptocurrencies, the Ripple platform is designed in such a way that it can handle the whole transaction cycle.

Users are not dependent on using third-party services, third-party exchanges, or wallets to make a transaction and then have the money converted back to local currency on the other end.

B2B Focused Technology

Ripple is designed to be able to be compliant with banking security, risk and privacy requirements such as Anti-money Laundering (AML), and Know Your Customer (KYC) practices.

Businesses also operate under similar requirements meaning they would not have to go out of their way and create their own compliance policies.

Without other cryptocurrencies, they would be bound to such compliance policies.

This allows Ripple more scope to engage with financial services businesses and bring them into their platform.

Instant Interbank Settlement

Ripple offers instant settlements for interbank transactions. Currently, most interbank settlements, be they international or local, occur on the SWIFT network or local networks that operate in a similar fashion.

As sophisticated as these networks are, they rely on decades-old infrastructure and best practices that cannot compete. A SWIFT payment from one bank to another relies on intermediary banks to act as middlemen.

This adds unnecessary cost and elapsed time to each transaction that as a result can take days to clear. In contrast, a Ripple payment can clear across borders in a matter of seconds.

Important: This is not investment advice. We present a number of common arguments for and against investing in this commodity. Please seek professional advice before making investment decisions.

2 Reasons Why You May Not Trade Ripple

  1. News Cycle Exposure
  2. Narrow Appeal

News Cycle Exposure

Ripple Labs have ambitiously been working on providing solutions to the financial services industry since before Bitcoin was invented, and as such have not made as many inroads as expected.

Ripple is still a cheap buy with a lot of upside price potential, but its price is also heavily influenced by external events.

If the financial services industry decides to get behind Ripple in a big way, this would have a huge bearing on the price.

However, this hasn’t happened yet and the market remains volatile and hanging on the next news article that relates to its adoption.

Narrow Appeal

Most cryptocurrencies benefit from their users becoming the biggest users and advocates of their platforms – the more users that buy-in, the more the platform makes an impact on the market.

On the other hand, Ripple has a much narrower and pre-defined use case that narrows its metrics for success.

This means that Ripple users are more likely to feel a type of disconnect as the success of the platform is more reliant on the efforts of Ripple Labs’ ability to bring financial services partners on board than it is on its holder’s enthusiasm and advocacy.

Where Can I Trade Ripple?

One preferred option is to not buy Ripple at all and instead to trade Contracts for Difference (CFDs) using a regulated broker.

A CFD is a contract between you and the broker. Instead of buying your XRP directly you would buy a CFD and take a short or buy position.

Other derivatives products with Ripple include options, futures, and forwards, though not many brokers offer these.

You then lose or make money depending on the direction that the market moves in. This allows you to take advantage of shifts in the market without ever owning a single XRP.

Ripple Brokers Available in

Here’s a list of regulated options available in that offer CFDs and other trading products on cryptocurrencies such as Ripple.

IMPORTANT: CFDs are not available in the USA due to local regulation, and regulated brokers do not accept US citizens or US residents as clients.

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 73.90%-89.00% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

How To Buy And Own Ripple

So you’ve decided that you want to take the plunge and trade Ripple. The next step is to figure out how to acquire some XRP.

The best way to acquire Ripple is through a cryptocurrency exchange. This involves exchanging your fiat currency for XRP.

Unfortunately, using an exchange can be a risky prospect. The exchange represents the first fault in your security and you are relying on them to follow best practices.

Some cryptocurrency exchanges like BitMex and OKEx also offer derivatives products, so they take the role of a hybrid broker-exchange service.

What Is The Best Way To Buy Ripple?

If an exchange does not properly protect itself then it could risk getting hacked, putting your trade at risk. It can also be difficult to resolve disputes should a problem arise, especially if the exchange is based overseas.

The best way to buy Ripple is to first buy Bitcoin using Fiat currency through an exchange. You can then trade this BTC for XRP.

Here is a list of exchanges where you can do this:

ExchangeDescription
BinanceExchange hundreds of coins, buy futures and leveraged tokens, crypto loans
BitfinexCrypto exchange, margin trading, crypto derivatives 👜 🔹
BitmexCrypto exchange, futures, perpetuals, 100x leverage on some derivatives 🔹
CoinbaseCrypto exchange, get paid to learn about crypto, offers USD Coin 👜
HuobiCrypto exchange, 5x leverage for spot trading, futures, swap, C2C lending 👜
KrakenCrypto exchange for traders at all levels, many crypto derivatives 🔹
OKExCrypto exchange, spot, futures, perpetual swap, and derivatives trading, cold and hot wallets 👜
StormgainCrypto exchange, low fees and 200x multiplier on crypto futures 👜 🔹
👜 = Built-in cryptocurrency wallet

🔹 = Demo available

There are two main ways to buy Ripple. Which one you decide to use will largely depend upon your priorities.

Coinbase: User-Friendly Crypto Exchange

There are a lot of different Bitcoin exchanges out there but Coinbase will suit the majority of traders. One of its most useful features is the ability to buy Bitcoin either by bank transfer or with a credit/debit card.

These transactions generally come with low fees. Coinbase charges 1.49% if using a bank transfer and 3.99% if using a credit or debit card. This fee rate is competitive compared to the rest of the market.

Identity Verification With Coinbase

It should be noted that Coinbase requires you to provide your ID in order to trade in cryptocurrency. This helps to prevent the exchange being used for criminal activities like money laundering.

It’s considered best practice and the more reputable exchanges almost always use some form of Identity verification.

Signing Up With Kraken

Once you have acquired your Bitcoin the next step is to convert it to Ripple. One of the better exchanges to trade BTC for XRP is Kraken.

Once you have signed up for an account and jumped through the verification hoops you will be able to transfer your Bitcoin to your Kraken wallet. Then you’re finally ready to trade your bitcoins for some ripples.

Kraken is a reputable exchange and you are unlikely to encounter any issues. The main advantage of trading with Kraken is that they have a large number of currency pairs.

This means you will be able to trade your XRP for a variety of other altcoins and fiat currencies.

Staying Safe With Coinbase And Kraken

Remember that you will need to take extra steps to protect yourself when using exchanges.

Always enable two-factor authorization and if possible try to avoid keeping all of your coins in a single wallet and make sure that you keep your access codes somewhere safe. If you lose them you may not be able to access your XRP.

LocalBitcoins: Peer-To-Peer Purchase

You can also purchase Bitcoins through a peer to peer Bitcoin Exchange that does not require an ID.

One of the best options is LocalBitcoins which allows users to buy Bitcoin with almost any currency.

Once you have the Bitcoins you will then be able to trade these for Ripple at another exchange.

What Drives the Price of Ripple?

Major cryptocurrencies tend to rise and fall in tandem and Ripple is no exception. If you see a big rise or fall in the value of Bitcoin or Ether then expect to see Ripple follow suit.

As with all other cryptocurrencies, Ripple is volatile. You should expect to see fairly dramatic fluctuations in value.

What Role Does The Media Play In Ripple Prices?

Media interest plays a big role in the price of Ripple. As cryptocurrencies hit the headlines large numbers of new traders tend to pour in. This inflates the value of cryptocurrencies across the board.

This kind of rise is usually followed by a pronounced dip as early traders engage in profit-taking. You should keep a close eye on the headlines when deciding how to trade Ripple.

How Does Mainstream and Financial Adoption Impact Prices?

Ripple, in particular, sees large boosts when it is adopted by established financial institutions.

XRP saw a surge in value in May of 2017 when SBI Ripple Asia announced the creation of a Japanese Bank Consortium designed to facilitate cross-border payments.

Ripple is also prone to regulation aimed at curtailing cryptocurrencies but its role as a bridging currency provides it some protection.

Will China’s Hostility Towards Some Cryptocurrencies Obstruct Ripple?

You should also keep an eye out for changes in Asia, while China has recently become more hostile to cryptocurrency Ripple’s utilitarian nature may mean that it will be taken up by firms like Alibaba.

Firms can then facilitate faster payments.

The key driver of Ripple prices will always be the number of users of the RTXP network. The more support that Ripple’s open network gains the more value your Ripple trade will take on.

Further Reading

If you like to learn more about cryptocurrencies in general, you can:

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