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Will Ripple (XRP) Still Remain Relevant As SEC Battle Fails to End?

13 January 2023 15:16, UTC

While the crypto market continues to deal with the challenges of the bear market, regulators also have made life a living hell for some firms in the sector. One of such is Ripple — the company that has been at loggerheads with the United States Securities and Exchange Commission (SEC) over various allegations. The battle, which looks to be unending, has taken different turns to be in both parties' favour.  

But the concern for a large part of the crypto community has been the adverse effect on the firm's payment token, XRP. The XRP token is one of the cryptocurrencies that has served long enough. Unfortunately, this longevity has not been able to transform into a notable increase in value. Today, assets like Solana (SOL) Avalanche (AVAX) which were launched years after XRP, have surpassed the token in terms of adoption and popularity. Yes, you might say the Ripple team has been slow in development. You cannot deny that the troubles with the SEC have not played a part in the stagnancy. Now, we will assess if XRP still can stay relevant in the crypto market despite this long-lasting legal tussle. However, it would be best to consider what led to the battle before evaluating XRP's future potential.

XRP: The Security Allegations

Source: Unsplash

In 2020, the SEC sued Ripple Labs, the parent company of XRP, and two of its executives. The claim was on the basis that XRP was an unregistered security instead of a cryptocurrency. Who would have imagined that the token, which has existed as a trading asset on Bitcoin-loophole.io with millions of users, was a security? 

Well, the SEC had reasons to back up its claim. According to the regulatory authority, the company's CEO , Brad Garlinghouse, offered XRP to investors in the U.S. without proper diligence. Along with co-founder Christian Larsen, the SEC alleged that Ripple failed to register XRP worth about $600 million distributed across the country. The SEC also claimed that Ripple went against regulatory rules. 

Ripple, in response, denied the allegations. In fact, the company believed that the SEC, led by Gary Gensler, was only against crypto firms because he had little knowledge about the industry. Despite the reply, the SEC went ahead and prosecuted the company. Till the time of writing, the case was still an unresolved one. Although, there have been rumours that there would be a judgement in the first quarter of 2023. But then, let's recap how the case has unravelled. 

  • December 2020:

The SEC officially sues Ripple, its co-founders over the company’s inability to meet the demands of registering XRP as a security.

  • December 2020:

Crypto exchange, Coinbase removes XRP as an asset on its exchange in a bid to avoid being involved in the case.

  • March 2021:

The respondents petitioned the New York Southern District about the short notice of the SEC.

  • March 2021:

The judge in charge of the case rebuked the SEC, noting the XRP had utility and value.

  • June 2021:

The court grants the SEC an extension to provide its rules guiding digital assets like cryptocurrencies.

  • August 2021:

The SEC provides its rules and regulations on trading cryptocurrencies, and also added its internal control policy on volatile assets.

  • January 2021:

Judge allows the SEC to appeal after failing to provide proof that XRP was a security.

  • October 2022:

Ripple obtains Hinman’s documents as SEC filed against public revelation of the details.

  • October 2022:

Coinbase agrees to support Ripple in its defence against the SEC

  • December 2022:

Both parties submit final bids to get a quick resolution on the matter.

Despite the back and forth, there was still no certainty about who would emerge victorious with the upcoming ruling. The XRP community, in their own right, are optimistic about the verdict going in their favour. For these loyalists, a victory could produce an incredible uptrend for the cryptocurrency. Be that as it may, let’s look at the XRP performance in the last 365 days.

XRP: Surviving the Last 365 Days

After many cryptocurrencies reached all-time high in the last quarter of 2021, the following started on a "low-key" note. XRP was one of those who could not hit it or surpass its 2018 all-time high.

When 2022 began, XRP was trading around $0.79. This value was considered somewhat good for the token. But between January and April of the same year, the token was swinging between peaks and lows. The final nail on the coffin happened around May when XRP fell to $0.38. However, XRP was not the only crypto affected by the capitulation. The likes of Bitcoin and Ethereum followed suit due to the collapse of Terra LUNA. The cryptocurrency had been one of the best performers in the market at the time. In a short while of launch, it was called "the future of money."

The event led XRP to languish in the same area for months. However, there was some respite for the payment token around September as the XRP surged above $0.50. But the increase in value did not last long, as XRP faltered again in November 2022. There were several attempts to rise above the misery, but they yielded no significant results. The token then ended in 2022 around the same $0.3 region. At the time of this writing, XRP was exchanging hands at $0.37, with a market cap of $18.86 billion. However, the price dip was not enough to burst it off the market value ranking, as it was still ranked sixth.

Source: CoinMarketCap

What’s Next for XRP?

In between the troubles, Ripple dived into several sectors and expanded its operations. One notable part that caught the eye was its journey into Non-Fungible Tokens (NFTs). With the help of the XRP Ledger (XRP), Ripple has been able to penetrate the industry dominated by the likes of Ethereum, Solana, and Axie Infinity.  

In launching the collectibles, Ripple provided a $250 million creator fund. This aimed to attract users who had tried other blockchains and were not impressed with sales and volume. With the invention, XRP may gain more traction. At the same time, it could ensure that more dormant addresses become active wallets. 

In another aspect, Ripple has reiterated that it was committed to helping out with cross-border payments using its network. It would interest you to know that Ripple has virtual asset provider licences across different countries. There have also been reviews about the efficiency of the Ripple network. So, expect Ripple to continue its efforts in this regard.

As for the XRP price, we can’t say that it will increase monumentally in 2023. Some crypto analysts have mentioned that the year may not be when the bull market returns. But if you are an active follower of the crypto market, you would know that predictions are just predictions. 

The market is full of uncertainty. Still, this does not mean that the projections should be ignored. More importantly, you must evaluate your chances or speak to a financial adviser. The crypto market is still volatile, and most times, the trend of other cryptocurrencies depends on the Bitcoin movement. So, if you are confused about where to begin, you can check the historical performance of Bitcoin.

Nonetheless, it would help if you also remembered that this is not in any way investment advice. This article is purely informational. Hence, we suggest you carry out due diligence before choosing XRP as a potentially profitable asset to invest your money in. Also, note that it may do you a lot of good if you invest only money you can afford to lose.