Ripple’s (CCC:XRP-USD) controversial XRP token continues to flirt with the support level of $1. Investors are looking forward to the conclusion of its ongoing case with the Securities and Exchange Commission, where its case continues to get stronger.
Source: Shutterstock
Once it emerges from its regulatory troubles unscathed, XRP-USD is likely to regain momentum and reclaim its position as one of the more attractive crypto investments.
Ripple is still among the top cryptocurrencies globally, with a market capitalization of over $46 billion. Its utility as a robust payments network and an overseas remittance service quickly became a darling of crypto investors.
To be sure, regulatory issues have hampered its flight, though, so it hasn’t been able to breakthrough like some of its peers. Despite its troubles, XRP-USD is up over 200% but has been incredibly volatile, which is perhaps why the statistic is rather askew. Nevertheless, Ripple has plenty of upside ahead as it gets closer to victory in its battles with its SEC.
Ripple’s Case Is Getting Stronger
The SEC had filed a bombshell lawsuit against Ripple Labs back in December. It claimed that the distribution of the XRP token was essentially a “one long unregistered securities trade.” Moreover, the agency has argued that XRP has no utility other than being an investment contract in a company. Naturally, the case has invited backlash from the crypto community who feel that the government has lampooned them for years.
So far, though, Ripple has done exceedingly well in defending itself and advancing its claims. Most recently, the presiding judge Sarah Netburn sided with the arguments presented by Ripple and be ruling on the governing procedures next week.
A key issue in the case is the access of documents relating to the internal discussions that the SEC has had concerning Ripple and Ethereum (CCC:ETH-USD). The SEC has used a deliberative process to stall the opening of these documents, which are likely to severely damage its case. Judge Netburn has sided with Ripple on this issue multiple times, and it seems the defendant will prevail here.
These documents will probably show it didn’t receive enough time to prove itself to be a security. Moreover, Judge Netburn reiterated that Ripple’s CEO, Brad Garlinghouse had no inkling of these accusations beforehand.
Payment Platform Role
XRP is essentially a digital asset that is tailor-made for online payments. Its open-source, decentralized ledger can settle transactions between 3 and 5 seconds. Hence, many believe that it effectively disrupt the Society for Worldwide Interbank Financial Telecommunications (SWIFT).
Ripple’s creator also runs RippleNet, a currency exchange and cross-border transactions platform. Several financial institutions use the platform, which enables instant settlement of international transactions for as low as 0.00001 XRP. Hence, it effectively reduces the expenses for all entities involved in the transactions
SWIFT dominates international wire transfers and can process over 41 million transactions among over 11,000 financial entities every day. However, unlike XRP, it takes one to four days and sometimes even longer to process transactions. Moreover, SWIFT messages are expensive and carry a foreign exchange fee of 3% to 5% along with a base fee. Therefore, it’s significantly cheaper to use XRP or RippleNet.
Bottom Line On XRP-USD
Ripple has now been embroiled in controversy for the past 10 months, which has weighed in on its progress. However, it is defending itself well in the courts in what will be a landmark case for the industry. Once it gets past its legal troubles, the XRP token can return to posting strong gains again.
With its strong use cases in the alternate payments realm, the XRP token has a robust long-term case in the crypto industry.
On the date of publication, Muslim Farooque 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.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.