XRP Price Prediction if It Wins Lawsuit
2020 was a striking year for cryptocurrencies as it ended with the most prominent bull run since late 2017. Coins reached new all-time highs, with Bitcoin leading the cryptocurrency bull run charge. The price of Bitcoin reached its highest peak of over $58,000, and other prominent altcoins such as Ethereum and Binance Coin capitalized on the market growth. XRP, the native token of Ripple, did not mimic its early 2018 rally when it surpassed $3. However, the financial-oriented payment network increased its market cap during the emerging bull run.
In December 2020, Ripple’s potential market growth was put to a halt after the US Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and its executives Bradley Garlinghouse and Christian A. Larsen for failing to register the network’s native token as a security. The multi-billion-dollar lawsuit targeted Ripple’s activity from 2013 onwards. However, the filing at the Southern District Court in New York is viewed with skepticism in the crypto space.
What is XRP?
Ripple has reframed how the XRP token required to conduct cross-border financial transactions fits within the blockchain ecosystem. Unlike Bitcoin, which holds an intrinsic value and is not a security according to the SEC, XRP facilitates money transfers between different countries and financial institutions. Its value resides in its fast processing speed. That is why their MoneyGram partnership saw Ripple put its XRP token to good use as it faced a backlash from the crypto community for being a financial token.
Unlike Bitcoin or Ethereum, where new coins are created through the mining process as a reward, the XRP amount is limited to 100 billion coins. XRP tokens are distributed to companies and financial institutions such as Santander (MC:SAN), the Commonwealth Bank of Australia (OTC:CMWAY), or MoneyGram to create fast transactions through the Ripple network and avoid high conversion fees. Ripple is thus a payment network between institutions that helps decrease conversion and payment fees by relying on the xRapid network.
What’s Going On With XRP During The Lawsuit?
The lawsuit concerning Ripple’s activities from 2013 to the present is slightly peculiar as it was filed in the final moments of the previous administration and is considered to be a means to stomp on the potential growth of XRP. Although XRP suffered a loss of nearly 60% in price after the lawsuit began, it has recovered despite being subject to scrutiny in the US market and exchanges becoming wary of accepting XRP trades.
Most recently, MoneyGram has announced it will halt its partnership with Ripple, and the use of its XRP token, after the SEC launched its lawsuit. They have joined other well-known companies such as Binance US, Swipe, and OKCoin that have stopped transacting or using XRP, leaving US investors in limbo. Although the market has turned south on the XRP token, analysis indicates the price is becoming stable, with an upward trend and a signal for a potential breakout for the token. At the time of writing, XRP has a market cap of over $20 billion and a single unit price of $0.44, less than 5% down from the previous week.
On the Flipside
- The current price of XRP reflects the ongoing legal action and news about the progress of the trial.
- The price will remain the same with minimal changes while investors await a significant increase or decrease depending on the legal decision.
- If Ripple wins the case, exchange listing skepticism will be disregarded, and more XRP liquidity transfers will start in the US market.
- A positive or negative conclusion to the SEC lawsuit will drastically and irreversibly change the blockchain space in the US.
XRP is still in high demand as exchanges outside of the US aim to list the token, although there is skepticism about where XRP will end up. According to Jesse Powell, the CEO of Kraken Exchange which recently delisted XRP for its US residents, XRP can be a liability for exchanges depending on the outcome of the trial. He stated, “If XRP is found to be a security, the SEC would say that exchanges should have known.” If that happens, exchanges that operate within the US will face changes as side effects from the ongoing conflict with the SEC. Even though US citizens have limited opportunities to transact XRP on local exchanges, the token is not without support outside the US. Ripple Labs, Inc. is still creating new business opportunities by expanding its operations with Japanese banks and leading a new ledger project for central banks. If US regulators fail to make more accurate US blockchain regulations, Ripple is considering relocating, as its usability and centralized nature is beneficial for the financial system.
XRP Price Prediction if It Wins Lawsuit
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