Crypto Academy

Ripple vs. SEC: XRP Increases by 50% in Less than Two Weeks

XRP soars amid optimism for Ripple’s potential victory in its SEC lawsuit, influencing the broader crypto market.

Enthusiasm in the XRP futures market is reigniting as cryptocurrency traders anticipate a positive resolution for Ripple Labs in its ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC). As hope builds for Ripple’s success, XRP has witnessed a remarkable upswing, skyrocketing 60% since March 16 and attaining a ten-month peak of $0.58. This renewed optimism is also propelling the wider cryptocurrency market.

XRP/USDT 1-Week Chart.
XRP/USDT 1-Week Chart. Source: TradingView

Coinglass data reveals that the notional open interest in XRP, which signifies the dollar value secured in active and unsettled contracts traded on futures and perpetual futures platforms, has swelled by nearly 90% to $843 million, marking the highest level since December 2021. The combination of rising open interest and XRP’s increasing price usually suggests an influx of fresh capital backing the bullish trend. At the time of writing, the funding rates on the majority of exchanges were in the green, indicating that bullish leverage traders are controlling the market.

Ripple’s SEC Legal Showdown Fuels Altcoins

The surge in XRP’s open interest and value stems from the escalating confidence among investors that Ripple Labs will prevail in its legal confrontation with the SEC. A triumph for Ripple could potentially initiate a bullish shift down the risk curve, known as “alt season,” during which alternative cryptocurrencies such as XRP, SOL, DOT, gaming tokens, DeFi coins, and meme coins outshine Bitcoin and Ethereum.

It is essential to distinguish between Ripple and XRP. Ripple is a fintech firm dedicated to creating a global payment network, while XRP is an autonomous digital asset employed for various functions, including online transactions and currency exchanges. In late 2020, the SEC charged Ripple with selling unregistered securities after the company sold $1.3 billion worth of XRP. Ripple has consistently argued that XRP is a commodity, not a security, contrary to the SEC’s claims.

Securities are subject to stricter regulations than commodities and require increased transparency and reporting from companies. Therefore, a victory for Ripple would likely bring joy to the broader market, but a loss could trigger risk aversion. An SEC win could also have implications for other alternative cryptocurrencies, as they may become subject to more stringent regulations.

CFTC’s Bitcoin Classification & Ripple’s Potential Win 

The market’s expectation for Ripple to prevail has been bolstered by the recent classification of Bitcoin as a commodity by the U.S. Commodity Futures Trading Commission (CFTC) on Monday. If Ripple emerges victorious in its lawsuit, it will solidify XRP’s legal status in the U.S. market, fueling a price surge and potentially ushering in a new era of regulatory clarity for the entire cryptocurrency space.

Conversely, if the SEC prevails and XRP is deemed a security, it could result in a wave of regulatory scrutiny for other alternative cryptocurrencies, subjecting the entire market to more stringent oversight. The outcome of the Ripple-SEC case will have far-reaching implications not only for XRP but also for the broader cryptocurrency market, as it could set a precedent for the legal and regulatory treatment of digital assets in the future.

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