Photo Credit To Pavlos Giorkas Via Flickr
For the last year, Ripple has been involved in legal matters regarding the cryptocurrency XRP. For those unfamiliar, the legal issues first started in May 2018 when an individual Ryan Coffey filed the first lawsuit against Ripple Labs. The initial document can be found through this link. In simplest form, the one time XRP investor argued that Ripple violated federal and state securities laws by selling “unregistered securities” through XRP. This was not the only lawsuit, as more investors ended up filing similar suits after witnessing what Ryan Coffey was doing. Since the initial lawsuit was initiated in May 2018, it’s been a slow process and not many developments have been made. In May 2018, XRP was trading around .80-.90 cents before sharply falling after all these developments.
Many XRP investors believe this development is a major cause for price suppressions. You can argue XRP has gained more real-world utility since May 2018, but price has been one of the worst performers in the crypto markets this year. To make matters worse, CoinDesk first reported this morning that an amended complaint was put in place. XRP investors now had additional arguments based on SEC guidance around digital assets which has become a bit more clear compared to last year during initial legal matters. Ripple has until September 19th to respond & explain all these allegations put forth to them.
Was This Already Priced In?
There’s been an ongoing argument in crypto regarding XRP valuation. Some investors believe XRP could fall substantially if the crypto is considered a security by the SEC. Others have stated this has already been priced in. It was quite interesting to see the XRP price action today post news press. The article first came out by CoinDesk around 9:30AM-10:00AM CST. With the amount of detail included in the article, it was nowhere near good news for XRP / Ripple.
If we take a look at the 1 day chart on XRP, we will quickly see there was only a small sell-off throughout the day. Even the chart makes it look worse than it really was. XRP started at around .30 cents and ended up retracing to about .2948 cents which accounted for -1.73% This was indeed a small sell-off and supported many theories regarding XRP already pricing in all the legal possibilities.
One could also argue that the XRP sell-off today was not even related to the news. The reason for this is because a majority of the cryptocurrency market sold off today as the traditional financial system rallied with the Down gaining +382 points. We took a look at the chart overlay between Bitcoin and XRP today. Even after negative news this morning for XRP, it still ended up outperforming Bitcoin on the day. Time will tell if the legal developments will cause further sell-offs, but as of now it had little impact on XRP price action today.
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