By Hidayat Sultanli
On Jan 06, 2021
Following the lawsuit by the SEC, XRP having nightmares. There are so many things that affect XRP negatively. The future of XRP is still unknown.
XRP was booming with the rest of the cryptocurrencies in late November and early December. The price of XRP more than doubled and reached $0.77. It stayed above $0.6 for a couple of weeks before hit by the lawsuit. After the suit by SEC, XRP went back to lower than the pre-boom period price of $0.22 in just a couple of days.
Also, other companies joined the lawsuit against Ripple. According to Bloomberg, Tetragon Financial Group Ltd. filed a complaint in Delaware Chancery Court asking Ripple to redeem its securities. They said that they try to “enforce its contractual right to require Ripple to redeem” Series C preferred stock held by the company. According to the official statement made by Ripple, they had no merit to claim their Ripple equity they can redeem only “if XRP is deemed to be a security on a go-forward basis.”
In December, XRP surpassed the market capitalization of USDT and move up to become 3rd crypto to market cap. However, the latest price drop resulted in a significant fall in the market cap. Initially, XRP gave its place back to USDT, and recently it went down Litecoin. With the 10 billion market cap, it is in 5th place. Just in one month, the market capitalization went up to 30 billion and went down to 10 billion.
Grayscale published a press release to declare that they sold all XRP funds. Before the sale of funds, 1.46% of the funds of Grayscale was XRP. The selloff was highly motivated by the lawsuit of the SEC. They mentioned that they use proceeds to buy more other cryptocurrencies such as Bitcoin and Ethereum, proportionate to their weightings.
According to the Whale Alert, Jed McCaleb is one of the whales in XRP. In September 2019, Ripple transferred 100 million of XRP to the wallet of McCaleb. They said that it was due to the negotiation between McCaleb and the Ripple. Whale Alert determined many transactions with McCaleb during 2014-2019 and 1.05 billion XRP sold from the address of McCaleb. They find out that a significant amount of XRP he sent back to the Ripple. Although he was active selling XRP, this did not affect price significantly because it was little amount if we compare with total sales. In 2020, he sold more than $400 million worth of XRP.
The black clouds are over the head of Ripple. Everyone waits for the result of a lawsuit because it can significantly affect the future of Ripple.
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