XRP has seen a significant downturn, dropping below $0.54 as the U.S. Securities and Exchange Commission (SEC) intensifies its legal battle against Ripple. This recent development has stirred apprehension throughout the cryptocurrency market, compounded by broader financial uncertainties tied to escalating conflicts in the Middle East.
On October 1, the SEC announced it would appeal a previous ruling made by Judge Analisa Torres. This ruling had initially provided Ripple some relief by ordering a reduced fine of $125 million for institutional sales of XRP. However, the SEC's renewed appeal threatens to prolong the litigation that began in 2020, raising new questions about XRP’s future in the market.
Ripple CEO Brad Garlinghouse took to social media to voice his frustration, calling the SEC’s decision to continue litigation "irrational" and detrimental to the crypto industry. Similarly, Ripple’s Chief Legal Officer, Stuart Alderoty, described the SEC’s actions as "disappointing but not surprising," further highlighting the company’s mounting frustrations with regulatory oversight.
In response to the SEC's ongoing challenges, Ripple has indicated plans to consider a cross-appeal, aiming to clarify regulatory ambiguities that have hindered its operations.
The announcement of the SEC's appeal has led to a sharp decline in XRP’s price, which plummeted to $0.54 from a recent high of $0.64 earlier in the week. This price drop is not only a reaction to the legal news but also coincides with a broader sell-off across the cryptocurrency market, triggered by geopolitical tensions stemming from Iran’s missile attacks on Israel. These events have created widespread market jitters, causing declines in major cryptocurrencies like Bitcoin and Ethereum alongside XRP.
Data from Coinglass indicates a staggering $521 million in liquidations occurred across various crypto assets, with XRP comprising a significant portion of these losses. Investor sentiment has understandably soured, leading to panic selling.
In a surprising development, Bitwise has filed for an XRP exchange-traded fund (ETF) with the SEC despite the ongoing legal complexities surrounding Ripple. This filing may be seen as a positive signal for Ripple's long-term prospects, yet it faces the challenge of an uncertain approval timeline. The SEC is not bound by a deadline to respond to Bitwise’s S-1 registration form, meaning that the approval process could stretch out for years, adding to the uncertainty surrounding XRP’s short-term outlook.
With the SEC’s appeal dragging Ripple back into legal turmoil, XRP’s position in the market is precarious. Some analysts suggest that XRP could be entering a "zombie coin" phase, akin to other cryptocurrencies like Litecoin and Monero, which have struggled to maintain relevance. However, others believe that the recent price drop may only be a temporary setback.
Despite these challenges, Ripple maintains a robust $53 billion market cap and continues to expand its cross-border payment operations. The anticipated launch of Ripple’s stablecoin, RLUSD, is intended to strengthen its foothold in the institutional market. The future of XRP will largely hinge on the outcomes of the SEC case and Ripple's resilience amid these ongoing legal challenges.
XRP currently finds itself entangled in a perfect storm of legal disputes and global uncertainty. While Ripple’s ambitions for cross-border payments remain strong, the SEC’s renewed appeal has dampened market sentiment, resulting in a sharp decline in XRP’s price. As geopolitical tensions also weigh heavily on the cryptocurrency market, investors are left on edge, keenly awaiting developments that will shape XRP’s future trajectory.
October 2024, Cryptoniteuae