Forecasting the performance for cryptocurrency is a tough thing to do. These investments don't abide by the same rules as the regular market, and Ripple's XRP is no exception.
However, XRP seemed to follow a trend for 2020: by year's end, its value fell. Some experts suggest the cryptocurrency will recover in 2021, and I can't help but agree.
Why XRP has struggled in 2020
XRP is one of the key players of the alternative cryptocurrency market. From Nov. 1–24, it actually managed to grow by about 280 percent on the Coinbase trading platform. This took XRP's value from $0.24 to upwards of $0.92.
However, in the weeks since Nov. 24, XRP fell 20 percent, and that was just the start. There are a few reasons for this, namely low trading volume, market uncertainty, and news urgency that prompted large swaths of sell-offs.
A new altcoin recently came on the market, affecting XRP. The new currency is called Spark, and all XRP holders received Spark tokens on Dec. 12.
"Each Bitstamp customer that holds XRP will receive new Spark tokens as part of the airdrop. How much Spark you are going to receive depends on how much XRP you have in your account on 12 December 2020," Bitstamp said in a press release.
This move briefly increased XRP trading volume, but it wasn't everlasting. A sell-off soon followed.
What to expect from XRP in 2021
The new year is en route, and it's coming in hot. XRP will likely retain its volatility in the early days of January, eventually settling down and smoothing out its fluctuations. High volatility like this leads to cryptocurrency consolidation, which has its own effects.
According to cryptocurrency analyst Joseph Young, "In the foreseeable future, this raises the probability of a low-volatile consolidation phase for the XRP price."
How other cryptocurrencies performed this year
While XRP struggles, other cryptocurrencies have held their stance. This includes the famed Bitcoin, which grew from $16,000 to $19,915 in one fell swoop. In December, it fell a small nine percent, but that's nothing major for its overall value.
Ethereum is another cryptocurrency winner. They've seen their rate of coins in circulation increase throughout the year, as well as market valuation.
Should investors consider XRP moving forward?
Despite its struggles, XRP isn't a cryptocurrency to ignore. The coin has seen a 12-month gain of at least 221 percent. While events from late Nov. until now have redirected things a bit, it's not a 180-turn. If XRP does manage to recover, the end of 2020 may actually be a good time to hop on board—before things take a turn for the better.
How to invest in XRP
Investors can purchase Ripple's XRP through Bitstamp, Coinbase, or Coinbase Pro. While you can track XRP's value (as well as the value of other cryptocurrencies) on Robinhood, you can't currently trade coins on the platform.