5 mins- What’s been driving XRP?
- SEC meeting cancelled
- SEC vs Ripple case could conclude soon
XRP, the token issued by Ripple, has seen increased volatility in recent days. It broke out of a downward trend and surged to a three-month high before plunging 9%, reversing some of that spike higher and ending a three-day winning streak.
What’s been deriving XRP?
Cryptocurrencies across the board have experienced gains this week, boosted in part by expectations that Donald Trump will support the crypto sector should he win the elections and optimism that the Federal Reserve will start to cut interest rates in September. However, XRP has been leading the charge, rallying 40% this week, compared to a 12% gain in Bitcoin.
The rally and subsequent fall in XRP, the fifth largest cryptocurrency by market cap, has been related to the latest developments in the SEC vs. Ripple Labs case. The SEC sued Ripple Labs in 2020, claiming that the firm broke rules by raising money by selling the digital token without registering it as a security.
This case has been closely watched by the industry because of its implications for the reach of the SEC’s jurisdiction. Last July, a US District Judge ruled that sales of XRP to retail investors on exchanges didn’t amount to investment contracts, a decision which was considered a small win for Ripple.
SEC meeting cancelled
This week, the listing of a closed meeting on the SEC’s website sparked optimism of a settlement in the SEC vs Ripple case and that a conclusion would be reached regarding the status of XRP tokens. Ripple had reacted to news of the meeting by rising from $0.4443 on July 12 to a high of $0.6378 on July 17. However, when the meeting was canceled, XRP slumped 9%, ending the day yesterday at $0.5701.
The cancellation of the meeting, for which the SEC gave no reason, has slightly dampened optimism about a settlement. That said, there are some questions about the importance of the meeting after Marc Fagel, the former SEC lawyer, confirmed that there have been around 150 of these almost weekly meetings since the case started.
SEC vs Ripple could conclude soon
Despite the cancellation, Ripple remains hopeful that the case will be concluded sooner rather than later. In an interview with Bloomberg, Ripple CEO Brad Gralinghouse said, “We expect a resolution very soon but can’t predict exactly when the judge will rule.” The market is considering that the case could finally end this summer, potentially before the US elections in November.
Gralinghouse also stressed the importance of crypto regulation to prevent the growing number of lawsuits and harsh SEC policies.
XRP has maintained most of this week’s gains, which means the market is still pricing in a favourable verdict. Of course, this leaves the price vulnerable to a negative outcome. A ruling against Ripple could see the price fall.
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