Three things investors need to know about Ripple as its market capitalization reaches $177 billion, XRP is currently the third largest crypto asset in the world, following Bitcoin and Ethereum. However, behind this impressive rise are a series of complex issues that not all investors can fully understand. Here are three key factors you should carefully consider before deciding to invest in XRP. 1. Ripple is not XRP One of the most common mistakes new investors make is to interchangeably use the names Ripple and XRP. In fact, these two entities are closely related but exist independently: Ripple Labs is a fintech company based in San Francisco, focused on developing cross-border payment solutions. XRP is the cryptocurrency created by Ripple in 2012 for its payment network. Ripple is also commonly used to refer to the RippleNet payment network, while XRP is the primary currency unit in the XRP ledger. It is this difference that has led to the historic legal battle with the SEC. The SEC considers XRP to be an unregistered security, and thus filed a lawsuit against Ripple in December 2020. The lawsuit has been ongoing for years and is still in the final processing stages. This case clearly demonstrates the legal risks that XRP faces. 2. XRP - "the bank’s currency" XRP is referred to as a "bridge currency". Its primary function is to quickly convert fiat currency through a blockchain network. Therefore, XRP was initially designed for cross-border remittances. Currently, XRP is mainly used for large transactions between banks and financial institutions. Its superior speed and low cost make XRP an attractive option in the international payment sector. This is why XRP is often referred to as “the currency of the banking world.” However, to expand its application and attract banks, Ripple does not solely rely on XRP. For example, last year, the company launched a new stablecoin called Ripple USD to increase the demand for XRP. It is worth mentioning that stablecoins can be a double-edged sword. They offer a more stable and convenient option than XRP in cross-border transactions. Therefore, if stablecoins become a more popular choice, they may blur XRP's role as a bridge, significantly impacting the future growth potential of this currency. 3. Tokenomics - the ownership story of XRP In the cryptocurrency world, tokenomics refers to the mechanisms of issuance, distribution, destruction, and total supply management of tokens. This is a very important factor for XRP because the debate over who truly owns XRP has been ongoing for a long time. According to the latest data: the top 10 addresses hold up to 41% of circulating XRP. The top 20 addresses control 50% of the total supply of XRP. This is equivalent to 20 investors holding half of Bitcoin, which easily raises market concerns about the potential manipulation of XRP's price. Although the true identities of these wallets are difficult to determine, many believe that they could be Ripple's founding members or early venture capitalists. This raises concerns about the possibility of a large-scale dumping at any time. A typical example is that in the past July, when XRP approached a high of 4 USD, one of Ripple's co-founders sold XRP worth $175 million, causing the price to plummet to 3 USD. This move raised questions among investors about XRP's future - why do insiders sell when the market is so excited? ✅ Advice before investing in XRP Three factors indicate that XRP is not the simple investment many believe it to be. Despite the many advantages of XRP: it has existed for over a decade, received strong support from financial institutions, and ranks among the top three by market capitalization... it also comes with legal risks, competition from stablecoins, and issues of concentrated ownership. Therefore, if you are considering investing in XRP, take the time to carefully research and understand the potential risks. If XRP fails to achieve the expected growth in the future, you will also understand the reasons. Conclusion: XRP remains a cryptocurrency with enormous potential, but it is also fraught with challenges. Caution and understanding are key factors that help investors navigate the volatile crypto market alongside XRP.