Markets
Ripple Extends Losses Friday, XRP Plunges Alongside Altcoins in Crypto Market Bloodbath
- Bitcoin price’s drop below the $55,000 support triggered a market-wide correction in major altcoins, including XRP.
- Ripple erased all of the gains of the past fifteen months and hit $0.40 early Friday.
- XRP extended its losses by 7%, falling to $0.38 on Friday.
Ripple (XRP) racked up losses alongside major altcoins and Bitcoin early Friday. Bitcoin transfers from the German government and Mt. Gox’s repayment to creditors created uncertainty among traders and increased pressure on Bitcoin and altcoins like XRP.
The latest developments in the Securities and Exchange Commission (SEC) lawsuit against Ripple are skewed in favor of the payment transfer company, with Judge Amy Berman Jackson treating Judge Torres’ 2023 ruling as a precedent in the SEC lawsuit against Binance.
Daily Market Movers Roundup: Ripple Hit By Sharp Correction Amid Crypto Bloodbath
- Ripple erased its gains of the past fifteen months, falling to a new 2024 low of $0.38 early Friday.
- At the time of writing, XRP is trading at $0.39, wiping out nearly 7% of its value on Friday.
- Developments in the SEC vs. Ripple The lawsuit supports Judge Torres’ ruling that XRP is not a security in secondary market sales.
- Judge Torres’ 2023 ruling, which handed Ripple a partial victory in its long-running legal battle with the regulator, was bolstered by Judge Amy Berman Jackson using it as precedent in the SEC’s lawsuit against Binance.
- Ripple traders have been dumping their holdings at a loss since April 2024, according to data from Santiment.
XRP NPL and Offer on Exchanges
Technical Analysis: XRP Falls to 15-Month Low
Ripple has been in a downtrend since March 11. altcoin Bitcoin hit a 15-month low of $0.38 on Friday morning, with the altcoin erasing gains from early 2024 amid a market-wide correction in cryptocurrencies.
Ripple could find support at the March 21, 2023 low of $0.37 if it extends its losses. XRP is down 7% on Friday.
XRP/USDT Daily Chart
Conversely, a daily candlestick close above $0.4611 could invalidate the bearish thesis and push XRP towards the next psychologically important resistance at $0.50.
SEC vs Ripple Lawsuit FAQ
It depends on the transaction, according to a court ruling issued on July 14: For institutional investors or over-the-counter sales, XRP is a security. For retail investors who bought the token through programmatic sales on exchanges, on-demand liquidity services, and other platforms, XRP is not a security.
The U.S. Securities & Exchange Commission (SEC) has charged Ripple and its executives with raising more than $1.3 billion through an unregistered offering of the XRP token. While the judge ruled that programmatic sales are not considered securities, sales of XRP tokens to institutional investors are indeed investment contracts. In this latest case, Ripple violated U.S. securities law and will have to continue to litigate for the approximately $729 million it received under written contracts.
The ruling delivers a partial victory for both Ripple and the SEC, depending on how you look at it. Ripple gets a big win on the fact that programmatic sales aren’t considered securities, and that could bode well for the broader crypto industry, as most of the assets targeted by the SEC’s crackdown are managed by decentralized entities that sold their tokens primarily to retail investors through exchanges, experts say. Still, the ruling doesn’t do much to answer the key question of what makes a digital asset a security, so it’s not yet clear whether this lawsuit will set a precedent for other open cases that affect dozens of digital assets. Issues like how decentralized is appropriate to avoid the “security” label or where to draw the line between institutional and programmatic sales are likely to linger.
The SEC has stepped up its crackdown on the blockchain and digital asset industry, filing charges against platforms such as Coinbase and Binance for alleged violations of U.S. securities law. The SEC argues that the majority of crypto assets are securities and are therefore subject to strict regulation. While the defendants can use parts of the Ripple ruling to their advantage, the SEC may also find reasons to maintain its current strategy of regulation through enforcement.
The court’s decision is a partial summary judgment. The decision can be appealed once a final judgment is issued or if the judge allows it beforehand. The case is in the pretrial phase, during which Ripple and the SEC still have the opportunity to reach an agreement.