The price of XRP fell 21% in two days on Coinbase from $ 0.5695 to $ 0.4491. The decline was accelerated by reports on Dec. 22 that the U.S. Securities and Exchange Commission is preparing a lawsuit against Ripple.
Brad Garlinghouse, CEO of Ripple, said the SEC “voted to attack the crypto,” citing a Fortune article. he wrote:
“Today the SEC voted to attack the crypto. President Jay Clayton – in his final act – picks winners and tries to limit US innovation in the crypto industry to BTC and ETH. We know crypto and blockchain technologies are not going anywhere. Ripple has and will continue to use XRP because it is the best digital asset for payments – speed, cost, scalability, and energy efficiency. It is traded on over 200 exchanges around the world and will continue to thrive. “
The price of XRP fell about 13% in the wake of Garlinghouse’s tweet as some industry executives expressed concern over the situation.
Meanwhile, cryptocurrency traders are mixed on XRP’s next destination. Some say it might not have a huge impact on the price because Ripple has faced regulatory hurdles before. Others believe that XRP could continue to stagnate as a result.
Ripple’s situation is different than Block.one’s, says lawyer
One of the main talking points in the lawsuit reported against Ripple by the SEC is the difference between Ripple and Block.one.
Block.one, the company behind the EOS ecosystem, settled with the SEC for $ 24 million before there was an active litigation.
Since Ripple expects to deal with active litigation, the relationship between Block.one and the SEC is different from the Ripple case. Jake Chervinsky, General Counsel at Compound Finance, said:
“No. The EOS action was only for the EOS ERC-20 token on Ethereum, not the native EOS token on the EOS blockchain.[dot]one settled with no active litigation, and at that time the ERC-20 token was no longer marketed. Here, the SEC will assert that an actively traded token is a security. “
Chervinsky also raised the possibility of centralized exchanges temporarily removing XRP from the list while the case is pending. Since there is no historical precedent for this type of regulatory conflict, this remains uncertain. He wrote:
“We will have ample time to discuss the merits of the SEC’s Ripple enforcement action after the complaint is filed. Right now, the big question is whether centralized exchanges are removing XRP while the case is ongoing. I bet a lot of lawyers are making emergency appeals right now.
Immediately after the news broke, the social media volume for the keyword “XRP” increased, according to to Santiment analysts.
What happens now to the XRP price?
The price of XRP rose sharply in November, breaking a multi-year downtrend as the price of Bitcoin (BTC) surpassed $ 18,000. At the time, XRP saw an impulsive rally on Coinbase, seeing a brief “fear of missing out” on the uptrend in the US market.
Cointelegraph Markets trader and analyst Michaël van de Poppe pointed out that after a massive impulse wave, a heavy retracement is likely. he Explain:
“XRP looks for further correction as it tests the $ 0.45 range for the third time, while consistently hitting lower highs. Very natural to see less volatility and a correction after such a wave of impetus. “
Some traders, however, say that after this pullback, XRP may consolidate and the lawsuit may turn out to be a “nothing-burger”.
“In all seriousness though, $ XRP sued by the SEC will likely be a hamburger. Not the first time ” wrote Alias trader ‘Loma’, who continued, ‘The fine probably ends up being a slap in the wrist compared to how many dollars they’ve earned / have. The market is corrective, most ALTs look like s —. XRP is not alone. “
Meanwhile, other traders Argue that the regulators’ aggressive approach could amplify negative market sentiment around XRP and push the price down further. As the chart above shows, sentiment around XRP hit new lows when news of the SEC lawsuit came to light.