- Ripple (XRP-USD) doesn’t have a Russian catalyst despite the possible connection
- SEC battle continues with Ripple looking more confident by the day
- XRP could skyrocket any day on the news
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A few weeks ago investors were looking at Ripple’s (XRP-USD) potential to pop because of the Russian invasion of Ukraine. Ripple seemed to be a prime candidate to jump upward because of banking sanctions on Russia and what it represents.
That looks less and less likely as Ripple does not want XRP to become associated with the shuffling of Russian assets. That logically implies that XRP will remain flat on that potential catalyst.
The other important narrative surrounding Ripple has to do with its long-running SEC dispute. That actually does have the potential to cause XRP prices to move explosively. Let’s review the two factors and how they affect the company and cryptocurrency.
Russian Connection to Ripple?
The Russian invasion of Ukraine serves as a powerful example of the interconnectedness of finance and politics.
It was only a few days after the invasion began that a large coalition of Western nations decided to ban Russian banks from SWIFT. SWIFT is an acronym meaning Society for Worldwide Interbank Financial Telecommunications. Remove Russia from the system and its access to foreign capital is effectively choked off and the nation isolated. Its ability to transact in the global financial system becomes severely compromised.
And because Ripple’s platform, RippleNet, allows anyone to exchange cryptocurrencies or make cross-border transactions, it became a logical target. The thinking was that XRP could see a significant uptick in usage as Russia sought workarounds to the SWIFT bans.
No Crypto Ban
Russian crypto accounts aren’t banned from accessing cryptocurrency at large in the wake of the invasion. I personally tend to agree with that judgment: The people are separate from the government and deserve to be treated as such.
But Ripple CEO Brad Garlinghouse explained through Twitter (NYSE:TWTR) why it won’t be so easy for Russia to evade global sanctions using crypto. Crypto platforms aren’t the black voids some might lead you to believe they are. He wrote “In order to convert crypto to fiat, exchanges/etc rely on banking partners who could lose their licenses if someone on the OFAC (Office of Foreign Assets Control) list is able to slip through.”
So the idea that XRP could be the crypto of choice for Russian Oligarchs or Duma members to skirt sanctions is ultimately flawed. That’s probably best for Ripple and XRP in the long run anyway.
There is other news though that could spike prices and keep them elevated.
Summary Judgment Possible
Ripple has long been embroiled in an SEC lawsuit. That lawsuit is going to have far-reaching consequences for the future of cryptocurrency as a whole. The Securities and Exchange Commission filed a lawsuit against Ripple in December of 2020 on the grounds that it sold $1.3 billion of unregistered securities to retail investors.
The crux of Ripple’s argument has always been that Bitcoin (BTC-USD) and Ethereum (ETH-USD) are not considered securities by the SEC. Ripple, by extension, is not one either. The company has repeatedly asked the SEC to define what constitutes a security but claims that the SEC has obfuscated for the entirety of the lawsuit.
There isn’t much new there. But what is new, and what could cause XRP to reach new highs, is Ripple’s push to end the case.
It is pushing to bring the case to summary judgment. If that happens there will be no trial and the judge will enter judgment for the movant. That would signify an end to the drawn-out battle and strike a blow to the SEC as it tries to increase its regulatory oversight of cryptocurrency.
What to Do With Ripple
It seems inevitable that Ripple will be victorious against the SEC in its lawsuit. Defendants move for summary judgment when they strongly believe they will be vindicated. Expect XRP to move to new, sustained highs once that occurs. The only question is when.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.