Traders and crypto enthusiasts were ecstatic on Thursday when the second largest crypto in market capitalization, Ripple, got a partial victory in its legal fight with the US Securities and Exchange Commission (SEC). Many experts perceived the ruling as a major catalyst that could significantly boost the prices of major digital assets.
SEC Lawsuit against Ripple and XRP Tokens
The SEC took Ripple to court, alleging that they sold XRP tokens on exchanges and through algorithms without possessing a securities license. On Thursday, a US District Court in the Southern District of New York ruled that the sale of Ripple’s XRP tokens did not constitute investment contracts but were nonetheless in violation of “federal securities laws”.
After the ruling, XRP surged over 96%, reaching a peak of 93.6 cents, its highest level since March 2022. Despite the surge, XRP maintained a gain of over 73% and closed at 74 cents in traditional markets. The partial victory for Ripple had an immense ripple effect across the crypto market. Bitcoin, the largest cryptocurrency, saw a 3.2% increase, trading at $31,328 in the 24 hours following the Ripple decision. Bitcoin shot as high as $31,700, reaching a more than one-year high.
Significant Price Surges in Ether, Cardano, Solana, and Polygon
Ether, Cardano (ADA), Solana (SOL), and Polygon (MATIC) all experienced significant price surges of over 16%. The CoinDesk Market Index, a measure of crypto markets performance, saw an impressive 6.1% surge. Nasdaq Composite and S&P 500 rose 1.5% and 0.8%, respectively, indicating stability in U.S. equities. Rising inflation data had a minimal impact on the crypto markets, resulting in only a slight increase in indexes.
Dave Weisberger, the co-founder and CEO of CoinRoutes crypto algorithmic trading platform, explained that the ruling by the USJudge was “very good news for crypto exchanges and investors regarding a wide range of tokens identified by the SEC in the Coinbase and Binance lawsuits.” A favorable ruling on the spot Bitcoin ETF applications could ease pressure on the tokens and spark a recovery rally.
Legal Clarity as a Positive Development for Crypto Investors
Joe DiPasquale, the CEO of a crypto fund manager, expressed optimism about the recently filed spot Bitcoin ETF applications. Due to the legal clarity provided by the ruling, it is expected that Bitcoin and other major cryptocurrencies will maintain their current levels. DiPasquale expressed that, based on the current situation, Bitcoin ETF applications hold promising prospects. Additionally, he mentioned that it would be surprising if BTC or other major cryptocurrencies were to revisit recent lows in the short term.
Data from Glassnode and CoinDesk’s Bitcoin Indicator also examined investor sentiment towards the asset. 83% of short-term Bitcoin holders are profitable, indicating a high level of comfort with the asset. Glassnode data shows that BTC has been stuck in the $30,000-$31,000 range for three weeks as investors await regulatory clarity.
The ruling came as a parting gift for the crypto investors. It remains to be seen how far this legal clarity will boost prices in the long run. The crypto market hopes for a positive resolution between the SEC and Coinbase, boosting the growing market.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.