After the United States Securities and Exchange Commission initiated a lawsuit against Ripple alleging that the firm had been indulging in the sale of securities worth $1.3 billion, a number of prominent exchanges across the globe (including Coinbase, Kraken, OKCoin) proceeded to delist Ripple’s native cryptocurrency, XRP, from their platforms.
As a result, many across the globe thought it was just a matter of time before the once-promising project died a slow-but-sure death; however, it seems that XRP has been on a tear ever since the bad news dropped, with the cryptocurrency’s value having risen by over 100% since the start of April — currently trading at around $1.03.
Back in December 2020, the SEC filed a lawsuit against Ripple Labs, its CEO, Brad Garlinghouse, and chairman, Christian Larsen, alleging that they had participated in an “unlicensed security offering” back in August 2013. Not only that, the government body further accused Garlinghouse and Larsen of failing to register their personal XRP sales — estimated to be worth $600 million — with the regulatory body.
In turn, Ripple’s defense counsel has challenged the SEC’s suit, stating that the XRP token is similar to other prominent cryptocurrencies, such as Bitcoin (BTC) or Ether (ETH), both of which have been classified as commodities by the SEC. Furthermore, Ripple’s legal team has also highlighted the fact that it took the commission more than eight years to file its complaint.
So, what has actually caused XRP’s price to surge? José Maria Macedo, a partner at cryptocurrency analysis firm Delphi Digital, told Cointelegraph that in his view, this latest monetary upswing comes alongside a broader rise in other old-timer altcoins such as EOS and Stellar (XLM) and a reduction in BTC’s overall market dominance.
He added that XRP’s performance can, most likely, be attributed to positive news surrounding Ripple’s SEC case, particularly as it relates to its win in a recent discovery hearing, which will force the SEC to hand over its internal documents on Bitcoin and Ether. Macedo opined: “This is a victory for Ripple and for the crypto space as a whole, as these documents will hopefully help shed light on the SEC’s rationale regarding tokens as a whole.”
XRP: You either love it or hate it
XRP has been one of the most divisive cryptos in the cryptocurrency community for years, and its recent track record was beginning to prove its detractors right. However, the currency’s recent ascent has been nothing short of meteoric. Providing his take on the subject, Sheraz Ahmed, host of the Crypto Valley Association podcast and managing partner at Storm Partners, a crypto and blockchain solutions provider, told Cointelegraph:
“XRP’s upward momentum is fueled by Ripple’s newly announced 40% stake in Asia’s leading cross-border payment processor, Tranglo. The partnership will undoubtedly increase Ripple’s exposure to the Asian market. Its price rally can also be attributed to a potentially looming ease in regulations should Ripple reach a consensus with the incoming Gary Gensler-led SEC administration.”
He pointed out that Ripple co-founder Brad Garlinghouse had earlier expressed optimism in the new cabinet, stating that his team plans to hold progressive discussions with the new SEC executive brass. According to him, Ripple has continued to prove that its potential is limitless, especially when operating within a crypto-friendly setting.
Lastly, Garlinghouse has previously lambasted U.S. regulators for lacking clarity after drawing comparisons with other advanced countries where Ripple has thrived in the past. “His assertions seem to hold water considering that the regulatory framework in many parts of Asia and the Middle East has spurred Ripple’s growth. Exchanges may reconsider their decision to delist the coin in the coming weeks,” Ahmed concluded.
XRP gains social media traction again
Justin Barlow, a research analyst at The TIE — a provider of alternative data for digital assets — told Cointelegraph that following Ripple’s acquisition of a 40% stake in Tranglo, the company saw an immediate spike in its price and tweet volume.
As can be seen from the chart above, digital mentions in relation to XRP have been picking up alongside the currency’s price over the last week, with tweet volumes hitting a new monthly high as well. Barlow added:
“Ripple is likely seeing interest overseas as it remains listed on international exchanges and has not (yet) been subject to the same regulatory scrutiny overseas that it has in the U.S. I am not an attorney, but I don’t think a U.S. exchange will relist XRP if the SEC asserts it is a security due to the potential regulatory implications.”
One thing to note is that the Asian and Middle Eastern crypto markets don’t yet have a huge regulatory setup that establishes the rules of the game like the SEC. On the one hand, this sort of framework allows new promising projects to feel comfortable and develop faster. But, on the other hand, it also sometimes results in the springing up of many scams.
Thus, it stands to reason that while trading platforms that are directly affiliated with the SEC may not get involved with XRP by actively opposing and contradicting the commission’s wishes, non-affiliated platforms may once again begin to list Ripple, especially if it continues to showcase such a high level of monetary traction in the near future.
What lies ahead for XRP and crypto?
Slowly but surely, it appears as though cryptocurrencies are proving to be more resilient when it comes to any form of governmental pressure that may be placed on them, as is best highlighted by XRP’s most recent rebound. On the subject, Cage Chen, chief technical officer of decentralized cross-chain asset management platform Cook Finance, told Cointelegraph:
“Some countries face massive currency-crushing inflation; some countries have incredibly low annualized average incomes; and some countries are dominated by government intervention and observation. If a cryptocurrency is readily available, financially sound and shows optimistic future projections, people will turn to it as a replacement financial instrument to fiat currencies.”
In regard to where XRP might be heading in the near term price-wise, Thomas Ménard, development director at Diabolo.io — a social crypto trading platform — believes that if the digital asset market at large is able to keep up its performance, the industry might be in for big things, adding: “If altcoins continue in their momentum, XRP’s upward movement could take it to several dollars per unit and thus catch up with the market.”
However, with regulators all over the world taking stronger stances against various digital assets, it stands to reason that an onslaught of bad news in relation to some currencies for an extended period of time could potentially have an adverse impact on their image and ability to operate — to the point where even their diehard army of supporters may not be enough to save the day.
Ethereum Co-Founder Vitalik Buterin Burns $6.7 Billion in Shiba Inu (SHIB) Tokens
Vitalik Buterin, who was gifted half of Shiba Inu’s total supply, has burned 90% of his holdings worth nearly $7 billion. The Ethereum co-founder further said he would allocate the remaining 10% to charitable organizations while also praising the “dog token community” for its generosity.
Buterin Burns $6.7B in Shiba Inu
The Dogecoin rise to the top led to the creation of numerous copycats that garnered significant attention in the past several weeks. Perhaps none became more popular than the self-described DOGE-killer – Shiba Inu.
One of the compelling features came from the anonymous developers who decided to send half of the total supply to Vitalik Buterin – the co-founder of Ethereum. The other half remains locked for liquidity on Uniswap.
Buterin, who donated 50 trillion SHIB tokens (and other dog-related digital assets) to India Covid Relief Fund last week, has decided to burn the majority of his Shiba Inu holdings now.
“I have decided to burn 90% of the remaining Shiba tokens in my wallet. The remaining 10% will be sent to a (not yet decided) charity with similar values to CryptoRelief (preventing large-scale loss of life) but with a more long-term orientation.” – he explained in the transaction hash.
Buterin outlined the severe problem COVID-19 has created for the entire world and added, “it’s important to think about the longer term future too.”
Upon the time of the transaction, the 410,24 trillion SHIB tokens Buterin sent from his wallet had a value of about $6.74 billion.
The booming popularity of SHIB caused a massive price surge in the past few weeks. It culminated in an all-time high at nearly $0.00004 after a listing on the world’s leading crypto exchange – Binance.
The Generosity of Dog People
Ethereum’s co-founder touched upon his aforementioned decision to donate a substantial amount of his dog tokens to charity organizations.
“Plenty of dog people have shown their generosity and their willingness to not just focus on their own profits but also be interested in making the world as a whole better.”
However, he also attracted some heat following his actions as some angry developers created coins with offensive names. As such, he urged the community to refrain from sending him new tokens without his consent in the future.
“I don’t want to be a locus of power of that kind. Better to just print the coins into the hands of a worthy charity directly (though do talk to them first.)”
$2.38 billion ‘rekt’ in crypto markets as Bitcoin drops to $43,000
‘Liquidations,’ for the uninitiated, occur when leveraged positions are automatically closed out by exchanges/brokerages as a “safety mechanism.”
Futures and margin traders—who borrow capital from exchanges (usually in multiples) to place bigger bets—put up a small collateral amount before placing a trade. If the market moves against them, the collateral is fortified and the position said to be ‘liquidated.’
Yesterday saw nearly $3 billion getting liquidated. $1.26 billion of that, as the below image shows, came from Bitcoin trades alone, with Ethereum trades ($515 million), Ripple trades ($80 million), and Dogecoin trades ($69.42 million) trailing in behind.
Overall, $1.78 billion worth of liquidations came from ‘long’ positions, or from traders borrowing capital to bet at higher asset prices. $345 million came from ‘short’ positions, or traders betting for lower prices (prices did fall lower, but the volatility may have contributed to even ‘shorts’ getting liquidated.)
Among all exchanges, Huobi saw over $633 million worth of liquidations, Binance saw $399 million, while options powerhouse Deribit saw liquidations worth $287 million.
In all, over 300,000 traders were liquidated, with the single largest liquidation occurring on crypto exchange Huobi—a Bitcoin to the tune of $90 million.
Musk’s Bitcoin scare
As such, the market pullback started shortly after Tesla CEO Elon Musk tweeted with regard to the carmaker’s $1.5 billion Bitcoin position on Sunday. “Mr. Whale,” an anonymous account on Twitter popular for their market calls, wrote yesterday that Bitcoiners would ‘slap themselves’ after they find out Tesla ‘dumped the rest of its Bitcoin holdings.’
It could have been probably a joke or a mere opinion from someone on the internet. But Musk replied to that with a single word: “Indeed.”
Indeed 😉 pic.twitter.com/67Ox8V6h2X
— Mr. Whale (@CryptoWhale) May 16, 2021
At press time, however, Musk put to rest the thousands of ensuing tweets that Tesla had, indeed, sold the remaining of its Bitcoin. “To clarify speculation, Tesla has not sold any Bitcoin,” he said in a reply to ‘Bitcoin Archive.’
To clarify speculation, Tesla has not sold any Bitcoin
— Elon Musk (@elonmusk) May 17, 2021
The market rose shortly after that. But is one man’s tweets have such an impact on crypto justified?
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‘The next bitcoin’ can only be…
With blockchain technology getting upgraded and refined on a daily basis, not all coins and tokens can thrive and sustain themselves in this competitive environment. Only a few of them would be able to be resilient and shield themselves, while the rest of them would eventually cease to exist.
In a recent appearance on CNN’s Squawk Box, CEO of Insider, Henry Blodget puts forward his perspective on the future of blockchain technology. He said,
“There are good fundamental reasons why we may have cryptocurrency and blockchain in the future… but that doesn’t mean dozens of cryptocurrencies are going to do well forever.”
Blodget further stated that the price of the not-so-big cryptos would not go up forever. At the same time, he also pointed out his concerns with respect to the flagship cryptocurrency and said,
“I think with Bitcoin, the big issue is that everyone understands that it is actually not well designed as a transaction currency. It is very resource-intensive.”
He further contended that the cryptoverse would end up inclining itself to a much more better-designed cryptocurrency.
Others from the industry, however, stated the contrary. Co-founder of Twitter, Jack Dorsey recently took Twitter to state,
“Bitcoin changes everything for the better and we will forever work to make Bitcoin better.”
Underlining the fact that more than $18 billion of Bitcoin transaction volume was executed on-chain in the past day, Anthony Pompliano exclaimed,
“Bitcoin is inevitable.”
CEO of MicroStrategy, Michael Saylor, also recently asserted that Bitcoin would eventually rise to a million, despite the short-term setbacks it faces. He further said,
“Bitcoin is something that you hold for a decade or decades… If you bought Bitcoin, you could lose money in a year or two or three, but over the course of four years, nobody ever lost money in Bitcoin. That’s the story with most of the dominant networks.”
However, it should be noted that Bitcoin’s market dominance has been dropping since March. Additionally, with altcoins currently holding the baton, the number of addresses holding more than one Bitcoin reached a 7-month low of 812,286. What’s more, Bitcoin’s trading volume has also been evidently fluctuating over the past month.
Nonetheless, Danny Scott, CEO of CoinCorner went on to hypothesize on the ‘next bitcoin’. He stated:
“The next Bitcoin is Bitcoin.”
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