As the cryptocurrency market experienced a broader pullback on Wednesday, with hotter-than-expected UK inflation data causing concerns about persistent inflation across major global economies, XRP witnessed a decline. Trading just below the $0.4550 level, the cryptocurrency dipped by around 2.5% on the day. However, recent progress in the XRP vs Ripple lawsuit and the digital asset’s current technical setup suggest that price forecasts remain optimistic.
The SEC’s lawsuit against Ripple, initiated in December 2020, revolved around the company raising over $1 billion through an unregistered security sale of XRP tokens. Ripple contests that XRP is not a security and is on the verge of obtaining evidence that the SEC had previously concurred with this view. The judge handling the lawsuit recently rejected an SEC motion to seal documents relating to a speech made by former SEC Chairman Hinman. In his 2018 speech, Hinman stated that neither Bitcoin nor Ethereum were securities.
Internal SEC documents related to this speech are expected to reveal dissenting views within the regulatory body about whether other cryptocurrencies, including XRP, should also be defined as securities. Pro-XRP lawyer John Deaton, founder of CryptoLaw and a former federal prosecutor, said, “We know that some senior officials at the SEC discussed that there was a reasonable basis to conclude XRP was not a security.” This leads to the idea that if the SEC staff believed XRP was not a security, Ripple could reasonably think the same.
In light of this, the rejection of the SEC’s motion to seal these documents was seen as a significant win for Ripple and provided a considerable boost for XRP. XRP/USD managed to surpass a downtrend active since mid-April and confirmed its bounce from a retest of the 200DMA earlier this month. While XRP is presently struggling to exceed its 50DMA, a retest of annual highs in the $58s is possible if news concerning the Ripple vs SEC lawsuit remains favorable. If Ripple secures a favorable ruling that does not categorize XRP as a security, this could benefit the US fintech company’s cross-border liquidity/payments business, potentially increasing XRP demand significantly.
Although a positive outcome in the SEC lawsuit would undoubtedly act as a powerful catalyst for XRP and potentially make it one of the top performers in the crypto space this year, anticipating more than a 10x gain to hit $10 per token may be overly optimistic. This is because the broader crypto market’s bull cycle appears to still be in its early stages. Cryptocurrencies like Ripple might have to wait a bit longer, for further fiat currency debasement through new rate-cutting cycles and liquidity injections, to achieve 10x gains from current levels.
Source: Cryptonews
