In a highly anticipated decision, Judge Torres yesterday ruled in favor of XRP in their case against the US Securities and Exchange Commission (SEC). The verdict is a positive development for the cryptocurrency industry, particularly with its focus on whether digital assets should be considered securities in the US.
The ruling is expected to set a precedent for the industry moving forward. It is positive for both altcoins and the wider industry, as the standard expectation is that these assets are not considered securities as long as they are made available to the public.
This event is likely to have wider implications for pending litigation and can help restore confidence in the industry for developers and draw more liquidity into the ecosystem.
XRP Surpasses Expectations With Massive Price Rise And Trading Volume Spike
Following the news, XRP saw a price increase to $0.93, its highest price since May 2021, closing at $0.82.
According to according to data collected by the research firm CCData, the news sparked an influx of trading activity, with XRP trading pairs on centralized exchanges (CEX) recording a total volume of $6.05 billion on the day, up 1351% from the yesterday.
Relisting the asset on other centralized exchanges, including Coinbase, Kraken, and Gemini, has also contributed to the spike in volumes.
The news surrounding the ruling also led to daily gains of nearly 100% for XRP, while other tokens such as Solana (SOL) and Cardano (ADA), recently considered securities, saw significant gains of 35% and 28% respectively.
Despite the negative backdrop XRP has faced as a result of the lawsuit, market depth liquidity at the 1% level has remained resilient since the start of the year. XRP’s 1% bid/ask side depth at Yearly Open was 26.5 million XRP, which saw a variance of 0.41% year-round and remained strong at 25.1 million XRP on July 12.
Derivatives data shows positive sentiment
According to the report, derivatives data indicates that XRP’s positive funding rate has held steady in recent days, in line with broader positive market sentiment.
News of the lawsuit generated a significant surge in speculative interest on the bidding side, with $280 million in Open Interest rising from $635 million to a high of $913 million on exchanges. In addition, funding rates reached more than 0.03% on all exchanges, more than three times higher than the baseline of less than 0.01% before the announcement.
On the other hand, the history of XRP’s funding rate shows that speculators trading perpetual contracts favored the upside, with minimal time spent this year in negative funding rate territory.
This underscores traders’ positive sentiment for XRP, which was recently rewarded with a large price increase following the announcement. While it remains to be seen whether XRP will maintain its extremely positive funding rate, it is currently a good benchmark to gauge positive sentiment within altcoins given the attention and volume it generates.
Given the success of the lawsuit, the implications for the market are overwhelmingly positive and the ruling provides clarity that did not exist prior to the ruling.
According to CCData, the market could see some trends emerging, such as coins that securities are believed to be recovering well and possibly outperforming and the potential for Bitcoin dominance to decline as an overall percentage of the market cap given the newfound optimism in altcoins.
Despite the recent wave of positive sentiment and renewed investor confidence, XRP has experienced a significant price drop. After nearly hitting the $1 mark, which it hasn’t seen since November 2021, XRP is currently trading at $0.7002, down more than 11% in the last 24 hours.
Featured image of Unsplash, chart from TradingView.com