XRP price surges 65%, now 4th largest crypto; is this the right time to buy or sell?

Ripple’s XRP has skyrocketed by around 65% in the past 24 hours after its landmark win over the United States Securities and Exchanges Commission (SEC). On Thursday, a court ruling brought an end to SEC’s 3-year-long crusade against Ripple, the issuer of the token. 

Recall that in 2020, the SEC sued Ripple for its supposed breach of the US securities laws. Following the lawsuit, several exchanges like Coinbase and Kraken were forced to delist XRP to avoid facing the regulator’s wrath.

However, the Southern District of New York Court yesterday delivered a partial victory to Ripple and as per the ruling issued by Judge Analisa Torres, Ripple’s XRP is “not necessarily a security on its face.” 

The court separated Ripple’s sales into three categories: institutional sales, programmatic sales, and “other distributions,” such as employee compensation. 

While the court ruled in favor of the SEC regarding XRP’s institutional sales, Ripple won when it came to programmatic sales and “other distributions.” This distinction was based on the premise that institutional investors tend to have more behind-the-scenes knowledge about token activity as compared to retail investors.

Read also:

Here is all you need to know about securities/non-securities, the cause of the SEC – Binance unending drama

As a result of the victory, several exchanges like Coinbase, Crypto.com, Kraken, Bitstamp, and Gemini have announced that they would be relisting XRP. It is however important to note that the SEC has the option to appeal and potentially reverse the court’s decisions down the line.

Effect of the court ruling on XRP

With the development which sent excitement all through the crypto space, XRP has surpassed BNB token to become the world’s fourth-largest digital asset by market cap.

At press time, XRP boasts a market cap of $41 billion, surging around 65% in market price (from around $0.47 to $0.78 currently), in the past 24 hours alone, per data from Coinmarketcap.

This partial victory in a long, drawn-out legal battle with the US SEC over the sale of XRP obviously powered the cryptocurrency’s surge. The regulatory upheaval Ripple has faced in recent years has made several exchanges delist XRP and kept the cryptocurrency under pressure.

What is next for XRP?

This flurry of announcements and exciting news led to an initial over 100% rise in XRP’s price but there has been a retracement in the past 12 hours or thereabouts. And this all boils down to the realisation that the Ripple battle with the SEC is still far from fully won.

Read also:

With a 83% gain, data shows Bitcoin was more profitable than every other asset in H1 2023

Although the crypto market reacted wildly to the announcement, warnings were still sounded about that part of the decision that did not favor Ripple. District Judge Analisa Torres found that while Ripple acted within the law in selling its token on public exchanges, the exchange still violated federal securities laws, notably in the unregistered sale of $728.9 million to sophisticated investors.

What this means is that Ripple may still face significant legal hurdles ahead and this is already reflected in the mild decline of the XRP token. 

In a nutshell, this landmark decision in the Ripple lawsuit constitutes a significant step in defining the nebulous relationship between cryptos and securities law. However, the battle between Ripple and the SEC is far from resolved. 

So for XRP investors, this is a time to take profits on holdings, not to buy more and expect rallies.