If you can find an investment that you think can quadruple your money, it's a no-brainer to buy it, even if you need to wait a few years. In that vein, there's a real chance that investing a total of $2,500 in a major cryptocurrency like XRP (CRYPTO: XRP) could, over the long term, become worth as much as $10,000.
Here's how to make this play.
First, let's disabuse ourselves of any notions that buying any quantity of XRP is going to make you get rich quickly. That's doubly true if you won't have the spine to hold on to it during a downturn or an upswing. No matter how strong the investment thesis for this coin is -- and we'll get to precisely how strong in a minute -- it needs time to play out.
Now, let's entertain another thought and add some perspective. If you bought $2,500 worth of XRP five years ago, in early 2020, you now would have a pile of cash worth more than $21,000, or nearly 750% more than what you had at the start. The reason for that was the rising adoption of XRP by banks, governments, and other financial institutions because of the coin's fast and low-cost processing of international money transfers.
What's more, those same drivers are still in play today, as well as a few new ones. As more users adopt XRP as their standard for cross-border payments, there's more demand for the coin, and it generates more usage fees for reinvestment into network upgrades and business development needed to gain more users. Today, it's even possible that the coin will be included in a proposed U.S. cryptocurrency reserve, which would be a major catalyst.
But that does not mean that if you committed your entire $2,500 to XRP today that your investment would rise in value linearly during the coming years, or even that it would steadily gain value as XRP's capabilities deepened and its adoption continued. Take a look at this chart:
Notice anything? This coin does not deliver returns in a consistent way. Buying during the very peak of its price, when there are many articles describing how great of a purchase it is and how the price will continue to rise forever, is a strategy that will leave you holding on to an underwater investment for a few years.
Therefore it isn't enough to have patience if you want to invest in XRP. You also need to understand crypto's cyclical nature.
Looking at the chart up above should probably prompt you to ask some hard questions, such as whether it is likely for your investment to surge in value in a relatively short time.