Unpredictably, XRP has emerged as a savior for the cryptocurrency market, successfully combating challenges posed by regulatory authorities and reviving market sentiment.
The price of XRP skyrocketed by 78% immediately after a significant ruling was handed down by a United States judge on July 13, stating that Ripple Labs‘ sales of XRP did not violate securities law. Since then, the price of XRP has continued to rise by approximately 47%.
According to the data provided by CoinMarketCap, as a direct consequence of this, its market capitalization increased from $25 billion to $36 billion, and its share in the overall cryptocurrency market increased from 2% to 3.5%.
This historic victory for Ripple has not only boosted the value of XRP, but it has also revitalized the market for altcoins, which are cryptocurrencies other than Bitcoin.
Ripple’s favorable ruling has sparked renewed optimism and interest in the altcoin market, which is occurring at a time when many cryptocurrencies are facing regulatory scrutiny regarding their classification as securities.
An analyst at the fintech and blockchain investment firm Fineqia International named Matteo Greco emphasized that the recent ruling regarding XRP is an important milestone for the alternative cryptocurrency sector. He is of the opinion that if XRP is not regarded as a security, then very few other digital assets can be regarded as securities in the same way.
According to data provided by CoinGecko, the total market capitalization of alternative cryptocurrencies has increased from $636.38 billion to $665.2 billion as a direct result of a favorable ruling regarding XRP.
In addition, an index that tracks the prices of coins that the SEC may investigate further to determine whether or not they qualify as securities saw an increase of 11%.
According to Ben Weiss, CEO of the cryptocurrency ATM network CoinFlip, the decision has brought a sense of clarity and direction to the process of evaluating tokens within the cryptocurrency space.
The favorable effects of the ruling were felt beyond XRP, with bitcoin, which is more commonly thought of as a commodity rather than a security, initially reaching a high point not seen in the previous 13 months. On the other hand, it has dropped back below $30,000 since then.
As a result of the ruling, the cryptocurrency market as a whole exhibited an optimistic disposition.
WAVES OF XRP VS. STABLECOINS
Despite the fact that Ripple and alternative cryptocurrencies in general have witnessed positive developments, obstacles still exist.
According to the opinions of various experts in the legal field, the SEC will almost certainly file an appeal of the recent ruling, which indicates that further legal conflicts may lie ahead. In addition, the total trading volumes in the cryptocurrency space are still significantly lower when compared to where they were a year ago.
Ripple’s practical use cases, in particular those involving payment settlements and remittances, have suffered as a result of the lawsuit, which, when combined with the emergence of competitors such as stablecoins, has had a negative impact.
Ripple Labs has acknowledged that its efforts to achieve sound crypto regulation in the United States are far from over and will continue for some time.
Because the regulatory environment is still unclear, the company intends to concentrate its investments on geographic regions that have developed regulatory frameworks for cryptocurrencies that are both transparent and friendly to the industry.
Following the conclusion of its successful legal battle, the company found itself relisted on a number of cryptocurrency exchanges, attracting the attention of institutional investors.
A survey conducted by Coinshares of digital asset managers who are responsible for managing assets worth $900 billion found that the percentage of investors who are now investing in altcoins has doubled from the previous month’s figure of 5%. In addition, some investors have reduced their holdings of major cryptocurrencies such as bitcoin and ethereum, opting instead to put their money into lesser-known cryptocurrencies such as polkadot and XRP.
According to Joseph Edwards, who is the head of research at Enigma Securities, the fact that there is now more legal clarity surrounding XRP has revitalized its potential as a settlement layer. He mentioned that the rapid growth of U.S. dollar stablecoins since 2020 has had an effect on the usage of XRP in settlements and remittances, as stablecoins have become more preferred for international financial transactions.
However, Edwards also mentioned that the ability of Ripple Labs to deploy its resources into new business development initiatives will play a significant role in determining the future trajectory of XRP. This will be one of the determining factors.