XRP prices experienced a significant drop of 8.5% in just one day, a considerable decrease among the largest cryptocurrencies, as the digital asset market faced a sudden sell-off on Wednesday. The token dipped to a low of 46.18 cents, its lowest in the month, as per Coindesk Indices data. XRP had reached almost 56 cents the previous day, with traders anticipating a document release related to the ongoing lawsuit between payment firm Ripple Labs and the U.S. Securities and Exchange Commission (SEC) that could boost XRP’s value.
The sharp downturn in XRP occurred alongside bitcoin (BTC) and ether (ETH), the two leading cryptocurrencies by market capitalization, losing crucial price levels on Wednesday afternoon following the Federal Reserve’s latest interest rate decision. Despite a pause in the rate hike campaign after 14 months – an event most traders deemed bullish for prices – BTC and ETH fell below $25,000 and $1,700, reaching 3-month lows.
The SEC filed a lawsuit against Ripple in 2020, claiming the company sold unregistered securities, specifically XRP. However, Ripple has historically distanced itself from the token, which supports some of its products and the XRP Ledger network.
XRP’s rally earlier in the week was fueled by the release of emails from William Hinman, former director of the SEC’s Division of Corporation Finance. Optimistic traders expected Hinman’s speech to highlight the SEC’s flawed reasoning in deeming the token a security, suggesting a favorable outcome for Ripple Labs in the ongoing lawsuit with the regulatory body.
On one hand, recent speculation surrounding Ripple has the potential to lead to a significant price increase for XRP within the next three to four months, pushing its value between $10 and $30, as crypto hedge fund manager Thomas Kralow mentioned in a note. However, on the other hand, the current uncertainty surrounding Ripple’s legal status and the SEC’s reasoning may influence a more cautious approach when it comes to investing in XRP.
In conclusion, while there is undoubtedly a great deal of excitement and interest in Ripple and its associated cryptocurrency XRP, further developments in the ongoing lawsuit, market fluctuations, and unforeseen changes can greatly impact its future value. Investors must consider these factors and their risk tolerance before making decisions to buy or sell XRP.
Source: Coindesk
