Santiment has commented on a court ruling that sales of altcoin XRP do not constitute securities. Accordingly, he suggests that XRP has significant upside potential following the decision. Let’s look at the details.
Rally comment for altcoin XRP
The court decision led to a rally in the price of altcoin XRP, reaching a 15-month high. In addition, this situation brought with it discussions about the digital asset. Whale activity in the XRP network further supports the positive momentum, pointing to continued growth potential. However, there are also recommendations to be careful as the rally could be overreacted.
Following a recent court ruling by Ripple Labs that determined that automated, open-market altcoin XRP sales do not qualify as securities sales, cryptocurrency analytics platform Santiment has outlined the path forward for XRP. The court decision led to a significant rally for the altcoin XRP. In addition, the digital asset rose more than 70% to a 15-month high. As a result, interest in XRP has reignited. On the other hand, it led to the controversy surrounding its existence and social domination.
XRP is important in cryptos
According to Brian Quinlivan, Santiment’s Marketing Director, a different situation has emerged. Accordingly, XRP now forms a significant part of the discussion within the cryptocurrency community. Quinlivan highlighted that the social dominance of altcoin XRP has risen to 7.4% of all discussions, the highest level since January 2021. He suggested that increased interest and fear of missing out on opportunity (FOMO) could lead to a period of “cooling down”. However, once attention turns away from XRP, the possibility of a second wave of price increases is strong.
In addition, Quinlivan cited whale activity on the XRP network as a bullish sign for the coin. Notably, whale transactions on the altcoin XRP network hit their highest level in 2023, marking an increase in large transactions. The flow of key transactions shows that the continued price increase movement is fueled by these key players. It also marks the beginning of the rally.
Be careful in the middle of the rally
Despite XRP’s optimistic outlook following the court ruling, Santiment’s Marketing Director urged caution. On the other hand, he suggested that the rally might be an overreaction. Quinlivan also reminded investors to be skeptical of initial reactions to positive news. Accordingly, it highlighted previous overreactions to major events such as the U.S. Securities and Exchange Commission lawsuit filed against Ripple last year.
The court ruling has undoubtedly given a boost to the altcoin XRP. However, it is crucial for traders and investors to consider the broader market dynamics and potential volatility. Quinlivan stressed the importance of taking a measured approach and not succumbing to overzealous market sentiment.
Looking into the future for altcoin
He says the price of XRP continues to rise and interest resurfaces. However, market participants are eagerly awaiting how the asset will perform in the coming weeks. The court decision provided a positive outcome for Ripple. It also revived optimism within the altcoin XRP community. However, investors need to be wary of potential fluctuations that may arise. Accordingly, it is of great importance that they closely follow market trends.
The news of Ripple’s partial victory over the SEC after almost three years of legal battle created a wave of joy across the entire crypto industry. But the victory may be short-lived as the SEC has ample reason to appeal the decision and drag this thing on for much longer, says attorney Bryan Jacoutot, a legal expert on Twitter.
SEC’s lawsuit against Ripple Labs
The SEC filed a lawsuit against Ripple Labs in December 2020. Accordingly, Ripple claimed to have made an unregistered security offering of over $1.3 billion through the sale of XRP. According to the SEC, XRP is a security under federal securities laws. However, the court ruled on June 13 that the random “programmatic sale” of altcoin XRP to regular investors does not constitute an unregistered sale of securities under Howey.
However, sales to institutional investors fall under Howey, which is used in the United States to determine whether a transaction qualifies as a security. In this case, the Court found that unlike institutional investors who expect Ripple Labs to use the capital to improve the Ripple ecosystem, buyers cannot know who sold them the altcoin XRP.
Howey test
According to Jacoutot, the Court’s reasoning is weak. It was also misapplied in the Howey case. The court noted that regular investors buy XRP knowing that it is subject to general cryptocurrency market trends, particularly the secondary sales of altcoin XRP tokens. However, Jacoutot believes that those who buy XRP can expect to profit from Ripple Labs’ efforts as well.
The lawyer also sued the Ethereum Foundation. Because everyone who participated in the pre-sale of ETH knew that they were buying from the Ethereum Foundation. Altcoin XRP decision cryptocoin.com Similarly, this would mean that institutional investors of the ETH presale are also buying unregistered securities.
What does the decision mean for altcoin?
According to Jacoutot, the decision opens up a few loopholes where abuse will be involved. In a tweet posted on Twitter by attorney Joe Carlasare, he explains that the rationale for the decision leaves an opening that can be used to legally initiate a pyramid scheme. In this case, profits from “programmatic sales” to individual investors can be distributed to institutional investors.
Ripple CEO Brad Garlinghouse states that the decision provides relief. He also said that the company can now promote various use cases for Ripple and its technology without worrying about legal repercussions.
This is definitely a win for Ripple. But an appeal by the SEC will spread the legal battle over the years. On the other hand, it will create another round of great uncertainty in the crypto market. After the decision, the price of XRP skyrocketed. It’s up 50% this month and is currently trading at $0.7154.
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