3 - 5 minute read
XRP, the token that powers the XRP Ledger created by Ripple, has been making headlines lately. With a market capitalization of around $26.6 billion, XRP is the world’s sixth-largest cryptocurrency. Although it is currently trading just north of the $0.50 level, it is up around 50% since the beginning of the year, thanks to a broader rise in crypto prices and growing optimism that Ripple will win its ongoing lawsuit against the US Securities and Exchange Commission (SEC).
Technical buying has also likely been a factor in XRP’s recent price rise. XRP broke above a key downtrend that had been in play since September 2022 and launched above all of its major moving averages in mid/late March. While near-term price predictions have become a little less bullish after XRP hit its bullish target late last month in the $0.54-56 area, XRP bulls remain confident that a lasting break above the mid-$0.50s would open the door to a swift rise back towards $0.91.
XRP’s ongoing lawsuit against the SEC has been a major factor in its price movements. The SEC sued Ripple for issuing XRP as an unregistered security back in late 2020. Ripple has been arguing that XRP is a digital commodity, meaning it falls under the regulatory oversight of the Commodity Futures and Trading Commission (CFTC). The CFTC announced a new lawsuit against Binance for operating as an unregistered exchange in the US, claiming that Bitcoin, Ether, Litecoin, Tether and Binance USD are all commodities. Traders are hoping that this means the CFTC will also view XRP as a commodity, undermining the SEC’s lawsuit against Ripple and reducing the regulatory risk that has been capping XRP’s price.
XRP’s Potential for Growth
Assuming that Ripple gets a favorable ruling in the lawsuit and assuming that XRP then swiftly closes the gap of past underperformance versus Bitcoin, XRP could theoretically 10x to around $5.0 per token. That’s 50% up versus the 2018 high in the $3.30 area, like how Bitcoin is trading right now versus its high from back then. Furthermore, if Bitcoin 2xs from current levels this year to approach $60,000, and as the Fed cuts interest rates to stave off a recession and bank crisis, we could be talking about 20x gains for XRP (to the $10.0 per token area).
Investing in XRP
Investors looking to diversify their crypto holdings should consider investing in crypto presales. This is where investors buy the tokens of up-start crypto projects to help fund their development. These tokens are nearly always sold very cheap, and there is a long history of presales delivering huge exponential gains to early investors. However, there is always a chance that the project’s founders don’t deliver on the project’s promises, and the presale tokens never take off in price (hence why they are sold so cheap).
XRP’s potential for growth is high, assuming that Ripple gets a favorable ruling in the lawsuit and assuming that XRP then swiftly closes the gap of past underperformance versus Bitcoin. The ongoing lawsuit against the SEC has been a major factor in XRP’s price movements, and traders are hoping that the CFTC will view XRP as a commodity, reducing the regulatory risk that has been capping XRP’s price. Investors looking to diversify their crypto holdings should consider investing in crypto presales, but they should be aware of the risks involved.
