Edward Farina, the founder and CEO of several crypto-focused initiatives, is confident that XRP was a better “investment” in early October than it was before July, when the U.S. Securities and Exchange Commission (SEC) claimed the coin was an unregistered security.
In a post on October 9, Farina claimed the coin was not classified as a “security” but was concerned that prices are at “the same level” as before the July 13 ruling.
XRP bears have reversed July 2023 gains
XRP, the native coin of the XRP Ledger, a decentralized blockchain that recently supported smart contracts, remains one of the most liquid crypto assets. Looking at price data from CoinMarketCap (CMC), the coin is submitted in fifth place in the market capitalization rankings, behind Bitcoin (BTC), Ethereum (ETH), BNB and USDT – the stablecoin.
At this level, the coin is one of the most liquid and has managed to shake off bear pressure since the SEC filed a lawsuit against some of Ripple’s top executives, including Brad Garlinghouse. In the lawsuit filed in late 2020, the agency said Ripple conducted an illegal crowdfunding campaign, raising more than $1 billion by selling unregistered securities. The allegations caused XRP prices to drop by 78%, from around $0.77 to $0.17 in days.
XRP got a reprieve in 2021 as it shook off losses, rising as high as $1.95, despite the ongoing lawsuit that saw Ripple lawyers defend the company against claims from the regulator. Prices fell in 2022, reversing gains before stabilizing in the better half of 2023.
In July, XRP prices rose sharply, briefly reaching $0.92 before cooling off, wiping out any gains in mid-August. Prices have stabilized, but the bears have erased gains made on July 13, when a US court ruled that XRP is not a security when sold to the general public on an exchange. Yet it is when it is sold to institutional investors.
In early October 2023, Judge Analisa Torres barred the SEC from appealing the July decision, stating that there was no “substantial cause for dissent.” The trial is not scheduled for April 2024.
Prices make no sense?
Following the judge’s decision that prevented the agency from appealing, XRP prices were relatively firm but at pre-July 2023 levels. Farina believes that XRP should be higher at spot rates, one reason why the market “ makes absolutely no sense and price manipulation is real.”
Whether XRP prices are manipulated or not is not clear at spot prices. However, the broader crypto market, including Bitcoin and Ethereum, is being suppressed after cooling off from its July 2023 highs.
Feature image from Canva, chart from TradingView