Ripple – SEC lawsuit’s results showed a shift in the sentiment of this class of investors toward XRP
Regulatory uncertainty is already impacting Ripple and its reputation with the XRP community. The cryptocurrency industry waits impatiently for the judge to decide in the widely publicized lawsuit between them and the United States Securities and Exchange Commission (SEC).
Liquidity Hub (LH), the newest product from Ripple, doesn’t support XRP, which has angered some XRP supporters. Stuart Alderoty, the general counsel for the blockchain startup, clarified that the product was “an enterprise (institutional) product, not retail” and that corporate customers valued regulatory clarity.
Ripple – SEC lawsuit’s results will affect XRP price?
Alderoty said that support for the cryptocurrency may return, saying, “We’re keen to support XRP in LH when we can provide a good customer experience.” The attorney appeared to be hinting at the potential introduction of XRP after the court ruling in the Ripple v. SEC lawsuit cleared up the market.
In a lawsuit against cryptocurrency exchange Bittrex, the SEC has designated six cryptocurrencies, including Dash (DASH), Algorand (ALGO), OMG Network (OMG), Monolith (TKN), NAGA (NGC), and IHT Real Estate Protocol (IHT), as securities.
According to the SEC, these six digital assets featured on the cryptocurrency trading platform could be regarded as securities under US law since, in their words, investors had “reasonable expectation of profits.” David Schwartz, the CTO of Ripple, commented on the news on Twitter, saying that it “sounds like investment advice to me.”
Sounds like investment advice to me.https://t.co/RjyUfVtN6C
— David “JoelKatz” Schwartz (@JoelKatz) April 17, 2023
Interestingly, Gary Gensler, the head of the SEC, continues to dodge whether Ether is a security, even during his recent appearance before the US House of Representatives Financial Services Committee.
XRP investment products take a hit as $400,000 are out after weeks of inflows
Additionally, according to CoinShares’ weekly report, last week saw about $400,000 in withdrawals from investment products, emphasizing XRP. For a short period, using these means to get exposure to cryptocurrencies, XRP was once a top choice for conventional investors.
This approach has been used to invest about $3 million in XRP since the start of 2023. However, the findings from last week signaled the end of that uptrend and revealed a change in attitude among these investors about XRP.
Two key factors caused this reversal. First, significant cryptocurrencies like Bitcoin crossed the crucial psychological $30,000 milestone, sparking a wave of profit-taking, selling sentiment, and a broad market slump.
The second, more speculative aspect is the absence of a decision in the SEC’s action against Ripple, which will establish whether or not XRP is a security. In anticipation of the case’s conclusion, which was anticipated to be disclosed in the spring, investors had been eager to have exposure to XRP. The verdict is still pending, though, well into the season. This has led some investors to sell their XRP investments, along with anxiety over the market’s future course.
A six-week streak of inflows into digital asset investment products ended last week, with withdrawals reaching $30 million. This can be interpreted as evidence of a cautious attitude among cryptocurrency investors.
XRP/USD 4-hour chart | Source: TradingView
XRP was trading at $0.46 at press time, down 1% on the day and 12% over the previous seven days but maintaining an increase of 8% in price over the previous month.
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