At last, news came of the Ripple Court Case that's been dragging on for 4 years now and it's a positive outcome. A federal judge has ordered Ripple Labs to pay a civil penalty of $125 million for improperly selling its XRP token to institutional investors. This fine is a fraction of the nearly $2 billion the SEC had sought in its lawsuit against the company.
The SEC sued Ripple in 2020, alleging they violated investor-protection laws by selling nearly $1.4 billion in unlicensed securities. In a partial victory for both sides, the judge ruled in July 2023 that XRP is a security when sold to institutional investors but not to the general public. The $125 million penalty relates specifically to 1,278 transactions that were found to have violated securities law in the institutional sales. The judge denied the SEC's request for Ripple to disgorge more than $876 million in profits from XRP sales, pay $198 million in interest, and an additional $876 million penalty. However, Ripple was ordered to cease any further violations of securities laws, with the injunction applying to its On-Demand Liquidity service.
Ripple CEO Brad Garlinghouse called the ruling a "victory" for the company and the crypto industry, stating "The SEC's headwinds against the whole of the XRP community are gone." However, the SEC could still appeal the decision, and crypto legal experts indicate this is likely to happen soon.
Ripple is expected to pay the $125 million penalty within 30 days, with the company's general counsel stating they can "pay that off our balance sheet with cash." The price of XRP spiked 25% to 64 cents after the ruling was announced and has now retraced a little, it's around $0.59 (at the time of writing).
This was a short-lived pump and many are wondering why XRP hasn't yet made a 10x jump, but the reality is such, that even in the face of this positive outcome from the court case, the damage done to the XRP reputation is long-lasting and possibly irreversible at this point.
As I mentioned many times already in my market analysis, XRP has lost its appeal for investors due to its poor performance over the past 4 years. To the older investors, XRP is a bitter pill to swallow due to its losses in ROI, especially compared to the other top 20 tokens (by mcap ranking), which have all been outperforming XRP for many years now and to new investors XRP seems like a bad risk-reward ratio pick, so they avoid it.
In other words: the XRP Army (the long term holders) are rekt, they've lost a ton of unrealised profit by holding onto an asset that has lost 99% of its value against Bitcoin (according to all time data provided by coincheckup) and 84% of its value in USD since 2018 - the ATH of XRP was on 4 Jan 2018 when the token reached $3.92. The token was never able to reach this price point again, even in the last bull market, while all other tokens were printing new ATHs, XRP was left in the gutter. Too many investors were burning their money in XRP for a good while. For a long time XRP was the go-to token for new investors looking for quick profits - the token was billed to become the next big thing in crypto, banks were going to use it to compete with Swift and all that jazz... but this never materialised, and with time the expectation of a big, bright future has been diminished.
The main issue for XRP now is that none of the new investors want to touch it, so not enough capital is injected in the token, while the long term holders are all in the red and have been for years now. They are all waiting to offload their bags whenever they get into profit and this means that any pump in XRP price is met with a massive selling pressure. All of this naturally holds the price back from reaching new highs.
The supply outweighs the demand. It's really that simple.
If you are a holder of XRP and waiting for a 10x or 50x return, you will be very disappointed as I don't see any scenario where this could happen. The end of the long court battle between Ripple and the SEC was expected to give XRP the much needed boost to rally to new highs, but after nearly 4 years of lengthy and messy court hearings, the momentum has been totally killed and XRP is no longer an asset that people care or talk about much anymore. This is a problem for any altcoin actually, since time and time again we are seeing how tokens that were once very popular and a hot property can easily fall out of favour with the crypto crowd and when that happens, there's no revival. The same happened to many other top mcap tokens: Stratis, Dash, Litecoin, EOS, NEO and many others used to be in the top 10 ranking once, but as time went by, they all lost their momentum and faded into the background. The same is happening to XRP, although, with its immense circulating supply, the marketcap keeps being high. But it's not growing fast enough to appeal to new investors, so if this doesn't change, XRP is doomed to fall out of its favourable top 5 ranking and with that, its slow demise is inevitable. It's already been happening for the past 4 years. Unless there's a complete 180 turn on the sentiment and interest in XRP, I see this token being good only for the trash.
All this could change, but only if Ripple comes up with some new use case for XRP and one that doesn't rely on creating a stablecoin that will be using XRP as gas, cause this won't make XRP any more appealing. This is right now the direction that Ripple is taking and I don't think this is enough to save XRP or to propel it to a new ATH. It's not going to happen and it seems that XRP is taking the same path as other dino tokens that used to be super popular once but no longer maintain any appeal to investors.
☝These are my opinions, not financial advice, always DYOR.
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The information contained in this article is for informational purposes only. Nothing herein shall be construed to be financial or legal advice. This content reflects solely my own opinion and analysis.
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