As a seasoned crypto investor with a knack for deciphering market trends and regulatory changes, I must admit that the current state of XRP has left me scratching my head. After witnessing the meteoric rise of Ripple’s native token following Trump’s victory and the impending departure of Chair Gensler, I was optimistic about a brighter future for XRP under the new SEC chair. However, the recent 12% plunge has left me questioning my investment strategy yet again.
TL:DR;
- Led by bitcoin, most of the cryptocurrency market is well in the green today, but this is not the case for Ripple’s native token.
- This comes in a particularly confusing time as Donald Trump made his choice for a new SEC chair and he is someone with good history with the crypto industry.
Pro-SEC Chair at Last?
Approximately four years ago, the United States Securities and Exchange Commission filed a lawsuit against Ripple, accusing the company and its top officials of illegally raising $1.3 billion by selling XRP tokens without registering them as securities. Since then, the case has experienced numerous twists and turns, but overall, it appears to have mostly favored Ripple, which has achieved a few partial victories.
Over the summer, the legal case was almost wrapped up with the company required to pay $125 million as part of the settlement. But, just when it seemed over, the SEC, led by Chair Gary Gensler at that time, decided to challenge a 2023 judgment, prolonging the court proceedings.
Donald Trump’s presidential victory on November 5 set a new tone for the game, as he had pledged to dismiss Gensler on his inauguration day. However, instead of waiting to be dismissed, the current SEC Chair chose to step down and announced his resignation several weeks ago, which will take effect on January 20.
As a researcher delving into the realm of cryptocurrencies, I find myself closely watching the developments at the Securities and Exchange Commission (SEC), with renewed hope following Trump’s nominee for the helm. Historically, this nominee has shown support for the crypto sector, as evidenced by Paul Atkins, a former SEC Commissioner. Given this context, one might anticipate XRP to experience an upswing in value. However, it’s essential to remember that past performance is not always indicative of future results.
Why Is XRP Dumping?
In simple terms, the events such as Trump’s election victory and Gensler’s resignation have sparked significant surges in the value of Ripple’s native token. The price of this asset has climbed from about $0.6 a month ago to almost $3 this week, representing an enormous increase of over 400% within this time period.
Currently, XRP has fallen by approximately 12% in a single day and is now trading below $2.3. Notably, this decline in value has caused it to lose its position as the third-largest cryptocurrency, with Tether taking over due to its increased market cap of around $130 billion.
The timing appears puzzling, considering the optimistic updates emerging from the upcoming Trump administration. So far, it seems like the recent rally for XRP might be an instance of ‘buying on rumor, selling on news’. This means that XRP significantly increased in value due to speculation about a significant change at the SEC, but is now decreasing as that change materializes.
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2024-12-05 09:50