SEC Uncertainty on XRP Keeps Investors Jittery as Price Fall Fear Looms


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SEC Uncertainty on XRP Keeps Investors Jittery as Price Fall Fear Looms

The fear for XRP downward spiral is not fading away, in fact, even BTC’s stupendous run over the past week hasn’t been able to change sentiment for XRP. There is a constant fear looming the SEC may consider XRP as a security which many believe if it happens may offshoot a big dip in its market value.

Lawsuits and SEC’s silence creating fear for XRP price

In the recent past, Ripple (XRP) has been hit by a string of lawsuits, all arguing that ripple misrepresented XRP. The core argument in these cases is that Ripple (XRP) is a security. The lawsuits are already playing their role of creating fear in the investor community, but what is more destructive for Ripple is SEC’s lack of clarity on XRP’s status whether it is a security or not.

No serious investor is ready to risk their money in an asset that has an air of regulatory uncertainty hanging over it.

This lack of clarity is not only restricting investors but also is making ripple (XRP) team counterproductive. This is because for them to work towards their objectives with maximum potential and achieve the result, they too need clarity on what exactly XRP is, it doesn’t matter whether it’s a security or not.

While everyone is still waiting for SEC to clarify its stand as it did for Bitcoin and Ethereum, the industry opinions are divided on its stance. While the team at Ripple believes it’s not a security, the leading names in the investor community are still of the view that it could be a security.

Ripple’s chief market strategist, Cory Johnson was quoted by CNBC in April 2018 where he mentioned

“We absolutely are not a security. We don’t meet the standards for what a security is based on the history of court law.”

Ripple CEO Brad Garlinghouse also echoed the same sentiment last month when he said,

“I think it’s really clear that XRP is not a security,” adding that the blockchain, or public ledger, “exists independent of Ripple.”

While statements from the other side, who predict XRP to be a security, include those of  Olymp Capital CEO Christophe de Courson was quoted saying to Express.co.uk-

“If the SEC states XRP is a security, the coin will definitely take a big hit because it is listed on all the major exchanges – except Coinbase – and moreover, I would expect a strong negative reaction of the global crypto-market for such news.”

Anatoly Castella, CEO, Elpis Investments was also reported by media saying that ripple’s XRP is set to miss out because it is not a “Digital Fiat”, and not a “real” cryptocurrency. He was quoted saying,

“Ripple resembles a fintech platform combining the best elements of fiat money and blockchain cryptocurrency”

Also, read: Despite Coinbase’s Avoidance XRP Expected to Rise Soon as Positive News Begins to Trickle in

A short-term pain but long-term gain for XRP either ways

AS the decision is still not out on SEC’s stance lets analyze both the aspects when the decision can bend towards.

If XRP is declared as a security the value of XRP would tank in the short-term. But now is a security, it would now be traded by registered broker-dealers in the U.S, dealers that have access to institutional money and have control over trillions of dollars in assets under their management. The entry of these players into XRP which is now a ‘security’ that is changing face the global banking industry would see one ripple share price shoot up to maybe to four digit or five digits bringing it to the same league of Google and Amazon.

On the other side, if the SEC declares XRP is not a security, the crypto community would be all over ripple (XRP). People would flock into XRP for the very same reason that they were to enter if XRP was declared a security, and that is its use case is changing the face of the global banking industry.

As Ripple is proving its utility its come to a point where it is called a security or not is only going to have a time-bound impact. In the long Ripple seems to attain heights either ways. But all eyes would still be on XRP and the one question.

Will XRP be termed as a security or not? Do let us know your views on the same.

 

Author: Nilesh Maurya
Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.
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Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Nilesh Maurya has been associated for past 8 years as an Investment Banker with Omega Capital, a bespoke Investment Banking outfit having offices in Mumbai, New York, Singapore, and Dubai. He has been a regular contributor to business publications such as Business India and Market Express and has been a mentor to many start-up companies. Follow him on Twitter at @KoinKing1 or connect with me on linkedin.
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