Crypto investors have been eagerly anticipating a significant breakthrough for almost four years. XRP ( XRP -2.31% ) , which has been stuck below the $1 level. It appears that the time has finally come. In early August, the ongoing legal battle with the Securities and Exchange Commission (SEC) reached a turning point. Ripple The company responsible for the XRP token has concluded its affairs, signaling that the most challenging regulatory issues for XRP are now resolved.
However, it is important to note that just because XRP is utilized in cross-border transactions, it doesn’t automatically make it a guaranteed profitable investment at present. With a plethora of information available, distinguishing valuable insights can be challenging. Therefore, if you are considering investing in XRP at this moment, it is crucial to be well-informed.
Effects of the lawsuit filed by the Securities and Exchange Commission
The SEC lawsuit revolved around determining whether XRP should be classified as a security or a cryptocurrency. The SEC argued that it should be considered a security, whereas Ripple argued that it should be considered a cryptocurrency. Ultimately, the court decided that when XRP is sold to institutional investors, it is considered a security, but when it is sold to retail investors, it is considered a cryptocurrency.
Consequently, Ripple is required to pay $125 million in civil fines, which is considerably lower than the $2 billion sought by the SEC. Therefore, Ripple is attempting to portray the result of this lawsuit as a success.
However, could it be argued differently? This victory could be seen as a costly one. In the previous year, Ripple leaders estimated that the legal dispute incurred expenses exceeding $200 million. Thus, while Ripple may not be directly paying the SEC hundreds of millions of dollars, it is incurring substantial legal fees.
Additionally, Ripple is not completely free from regulatory challenges. The SEC has not indicated any intention to retreat and still has the opportunity to challenge the recent court decision within a 60-day period. Furthermore, the SEC is examining different areas of Ripple’s operations to determine if there are any additional violations of securities laws.
Ripple faced a significant setback in its operations for an extended duration, which is challenging for any business to recover from. This led to the removal of the XRP token from prominent cryptocurrency platforms, allowing other digital currencies to gain ground on XRP. Consequently, the value of XRP remained stagnant for a considerable period. Despite a temporary rise of around 25% following a legal decision, XRP is currently trading at only $0.57.
Key catalysts
Disregarding the previous points, a positive outlook can be envisioned for Ripple and its XRP token. Ripple may be able to resume regular operations in the United States and focus on enhancing its primary services, like a widely-used solution for international money transfers. Additionally, it has the opportunity to innovate and introduce new products, like a U.S. dollar-backed offering. stablecoin .
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This combination is likely to push XRP past the $1 mark. However, the possibility of XRP reaching even higher levels depends on two main factors, both of which I consider to be unlikely. For instance, there are suggestions from some cryptocurrency experts that XRP might follow suit after. Bitcoin and Ethereum Obtaining approval for a crypto exchange-traded fund (ETF) could greatly help in drawing investor funds back to XRP. XRP was previously a popular cryptocurrency with a solid base of retail investors.
Another driving factor is the potential of an initial public offering (IPO) by Ripple. Through the funds raised from the IPO, Ripple could settle its obligations, including legal ones, and extend its reach globally. This could lead to increased utility for XRP, heightened activity involving the XRP token, and deeper incorporation of XRP into the conventional financial infrastructure. Should the Ripple IPO materialize, there is a possibility of a significant surge in the price of XRP.
Be cautious of the excessive excitement surrounding XRP.
XRP is believed to have significant growth potential, although it may not be as high as what optimistic XRP supporters suggest. Following the SEC court decision, there was a surge in XRP enthusiasts on social media promoting the token’s future potential. A crypto trader went as far as predicting a possible increase of 45,000% in XRP value by 2025.
Be cautious of the current excitement and attention on XRP. The modest 25% increase in XRP’s value following the SEC court decision, which was then followed by a decrease, indicates that there may be information about Ripple and XRP that is not widely known.
