XRP today jumped 80% after weeks of weak performance. The cryptocurrency has been trading just above $0.2 prior to the surge that coincided with Ripple’s defense against the SEC lawsuit referring to XRP as a security. In defense of the virtual currency, Ripple wrote:
“In 2015 and again in 2020, the US Department of Justice (DOJ) and US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) determined that XRP is lawfully used and traded in the marketplace as a virtual currency. Those determinations are consistent with the economic reality that XRP functions as a store of value, a medium of exchange, and a unit of account – not a share in Ripple’s profit.”
XRP demonstrates independence from Ripple
The XRP pump today corresponded with Ripple filing a defense against the SEC’s lawsuit which came in December. While this may lead many to believe that the two events are correlated, an ardent XRP supporter with nearly 60,000 Twitter followers, XRPcryptowolf says the pump rather shows that XRP can do without Ripple, the parent company responsible for issuing the cryptocurrency.
For many years, Ripple has been accused of manipulating the price of XRP, an allegation that the company has repeatedly refuted, maintaining that XRP is independent of Ripple. However, the company also periodically sells large amounts of XRP and claims they use the proceeds to run the infrastructure and not a deliberate attempt to dump the cryptocurrency on unsuspecting holders of the asset.
It is not known if the price increase has to do with the filing of defence by Ripple, nor is it known if it proves the independence of the cryptocurrency. However, Twitter responses generated by the incident suggest that XRP holders are optimistic that the price will go higher and many are not willing to trade yet.
“Congratulations to all of you who had strong hands and didn’t sell a single $XRP. This is only the beginning,” one of the responses read on Twitter.”
Liquidation strikes again
As is the case with any crypto-asset when the price goes up, the XRP price dipped a few hours after the 80% pump due to liquidation.
This is in spite of the fact that the “XRP army” still holds onto their holdings looking for a higher price. The price currently hovers around $0.4 with a 24-hour gain of 43%. Probably today’s events will help investors regain credence in the 4th largest cryptocurrency.