XRP crypto: +23% in 1 week, should you invest in Ripple?

Updated 22 Sep. 2022 at 3:11 p.m.

For several months, it has been difficult to talk about XRP crypto and Ripple, the company that backs the token, without mentioning the conflict between the protocol and the SEC (Securities and Exchange Commission). This week the lawsuit has taken a new turn and the advantage seems to be turning to Ripple. Thanks to this news, its token is enjoying renewed interest and is showing a very interesting price development.

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What is the purpose of the Ripple project?

What is Ripple (XRP)?

Ripple Labs is the managing company of the XRP cryptocurrency, theone of the best performing tokens of the crypto ecosystem.

This company was founded in 2005, long before Bitcoin. The idea was born from the imagination of Ryan Fugger and aimed to create the first decentralized monetary structure independent of any institutional influence.

It was not until 2012, after the launch of Bitcoin, that the Ripple blockchain was born with it, its native token the XRP. More specifically, the blockchain in question is called XRP Ledger.

Its purpose, however, is quite different from that of Bitcoin. Indeed, Ripple mainly focuses on interbank exchanges. The Ripple teams started from the observation that the exchanges between the different institutions were a matter of long and expensive process.

Indeed, currency exchanges between two banks, for example, require endless checks for obvious security reasons.

Ripple tends to offer a solution to this problem anduse his token as a relay. The latter ensures the security of the transaction, but also the speed of the latter.

Thus, the clearly stated objective of the Ripple company is to to eventually replace the SWIFT international payment system.

However, it is important to note that Ripple stands out from its crypto competitors by the fact that it uses a centralized protocol to work. Neither Proof of Stake nor Proof of Work can establish a security consensus.

The protocol in place is called XRP Ledger Consensus Protocol. It acts like a payment layer. This protocol thus makes it possible to process transactions very quickly (in a few seconds), securely and at low cost.

Access to institutions is provided by the RippleNet network which operates through an API system. Banks or even investment funds thus have the possibility of carrying out cross-border transactions without constraint and at any time.

The tokenomics of XRP crypto

Unlike most cryptocurrencies, the tokenomics of the XRP token reflect some voluntary centralization on the part of the protocol.

Indeed, the maximum supply is important, of the order of 100 billion tokens half of which are currently in circulation. The other half is held by the Ripple company which artificially controls the price of its token.

Decentralization is therefore not at the heart of the project. Especially since nearly 71% of the circulating supply is in the hands of whales, with wallets holding more than 10 million tokens. This is explained in particular by the fact that the protocol has a particular aim, mainly aimed at financial institutions and not individuals.

XRP crypto 23 in 1 week should you invest in
XRP offer from wallets containing more than 10 million tokens
Source : Saniment

The role of the token is therefore fundamental in the operation of the protocol. Indeed, as mentioned above, it serves as relay for exchanges between two currencies.

XRP represents the central vault for cross-border payments, whose service marketed by the company is dubbed On-Demand Liquidity.

For example, institution A based in Europe wishes to make a payment to institution B which is located in the United States. Schematically, A will use the Ripple protocol. The latter will convert the Euros into XRP crypto and then carry out a second conversion from XRP crypto to the Dollar.

A transaction takes an average of 4 seconds to be validated via the Ripple network against several days on average via the classic SWIFT payment protocol.

SEC lawsuit turns in favor of Ripple (XRP)

Although popular with banks and other financial institutions, Ripple and its payment protocol are marred by legal setbacks. the lawsuit filed by the SEC against Ripple now goes back almost 2 years. The American institution criticizes multiple facts including the lack of precision on the exact nature of XRP crypto.

The incriminating facts date back to December 2020. At that time, the company and its managers allegedly sold for $1.3 billion worth of tokens. This would have been done in connection with an unregistered securities offering.

Admittedly reprehensible act if the nature of the token entered into a explicit legal framework. Now, this is precisely what the crypto company stands for. Indeed, Ripple Labs has specified since the start of the trial that this sale is not illegal since the XRP token cannot be considered as a security (securities).

To note

Ripple is not the only company implicated by the SEC. Ethereum, since its transition to Proof of Stake, is also closely monitored by the American institution.

At a time when eyes are riveted on the next moves of the US government relating to the legal framework of crypto-currencies, the SEC and Ripple are attacking each other and the lawsuit tends to drag on as the subject is complex and lacks clarity.

US laws on securities were erected in the 30s… They are therefore no longer adapted to the modern era where crypto-currencies are taking up more and more space in the global economy.

In this context, it is therefore difficult for judges to decide on the Ripple and XRP crypto question.

Especially since the SEC seems to be struggling in vain to provide evidence for its accusations. At the end of last week, the cryptographic company took steps to have this lawsuit dismissed.

In these requests, she relies on the fact that the SEC is not in possession ofevidence to convict her. It reiterates its argument explaining that its cryptocurrency XRP cannot be perceived as an asset of the same nature as a stock or a bond.

This request could reach the finality of this lawsuit. It could constitute a reference case for US law.

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XRP crypto explodes: start of a bull run?

This request could potentially mark the end of the trial and the beginning of a legal framework. Since this turnaround, XRP crypto has triggered an upward movement very interesting…

It is trading today at $0.44, a level it lost in May during the crisis in the crypto ecosystem with an increase of 8% over the last 24 hours.

The psychological bar of $0.40 was crossed almost without difficulty and is now an interesting support. Volumes also show a boost as they show an increase of 2 billion since last Friday. The same goes for its marketcap which allows it to consolidate its 6th place among the largest crypto-currencies.

We are still a long way from its ATH of $3.84 reached in 2018. However, the dynamics are interesting and contrast with the rest of the market. As a reminder, Ethereum lost more than 17% of its value since The Merge. On his side, Bitcoin settles below $20,000. This proves to us that the crypto crisis may not be over.

To display +23% in one week is therefore a remarkable feat especially when this feat comes from one of the most appreciated cryptos in the ecosystem. Thus, XRP crypto represents an opportunity to keep an eye on.

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We would like to say thanks to the writer of this write-up for this remarkable material

XRP crypto: +23% in 1 week, should you invest in Ripple?

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