The cryptocurrency XRP (Ripple) rose after the U.S. Securities and Exchange Commission (SEC) withdrew its lawsuit against Ripple, but reactions among investors indicate disappointment that the price increase was not as large as expected. There are opinions suggesting that this is due to the news being already priced in, and there are talks of separate positive factors that could drive the long-term price up for XRP.
According to CoinMarketCap on the 21st, XRP is trading at $2.40 as of 4 p.m., down 1.91 percentage points from the previous day. Compared to its peak of $2.56 reached on the 19th (local time) when the news of the SEC's withdrawal of the lawsuit was announced, this represents a decline of 6.66 percentage points.
Earlier, Brad Garlinghouse, the Chief Executive Officer (CEO) of Ripple Labs, said on social media platform X (formerly Twitter) that it was "a moment we have been waiting for" and that "the SEC is withdrawing its appeal." He noted, "This is a significant victory for both Ripple and the cryptocurrency industry," and added, "The future is bright. Let’s build it together.”
The lawsuit between Ripple Labs and the U.S. Securities and Exchange Commission (SEC) is considered a symbolic case of conflict between the cryptocurrency industry and regulatory authorities. The SEC imposed a penalty surcharge of about $2 billion and filed a lawsuit, stating that Ripple Labs sold XRP without registering it as securities in 2020. However, in 2023, a New York District Court ruled that XRP is only considered securities when sold to institutional investors and reduced the penalty surcharge to $125 million. Although it was essentially evaluated as a victory for Ripple Labs, the SEC filed an appeal, leaving the determination of XRP's securities status to higher court judgment.
Recently, the SEC's withdrawal of this appeal has resolved years of uncertainty. As a result, at 11:43 a.m. (Eastern time) on the day of the announcement, XRP recorded a surge of 13.89% to $2.56 compared to 24 hours prior.
The resolution of uncertainty also led to a surge in trading volume domestically. During the same time frame, $1.22 billion worth of XRP was traded on Upbit, Korea's largest cryptocurrency exchange, accounting for 13.46% of global trading volume, making it the largest among worldwide exchanges. This surpasses the volume traded on Binance, the world's largest cryptocurrency exchange, which was $1.0981 billion (12.08%).
However, the rally in XRP's price soon showed signs of correction. According to foreign media, it was predicted that the price of XRP could soar by up to 20% if the SEC withdrew the lawsuit. However, as the price increase did not meet expectations, it appears a considerable number of profit-taking sales occurred.
Yoon Seung-sik, a researcher at Tiger Research Institute, analyzed that "since Donald Trump was elected President of the United States, there has been much discussion among investors about (the SEC's withdrawal of the lawsuit)" and noted that "there has not been consensus on whether this matter can outweigh pressures from macroeconomic factors such as tariff policy or interest rates."
Rather, there are suggestions that other factors may drive XRP's long-term price increase. It is speculated that Ripple Labs may have withheld announcements related to new developments or projects until the legal issues with the SEC were resolved. One promising new business mentioned is related to foreign exchange transactions in the Brazilian market, where Ripple has previously focused, including cross-border foreign exchange payment services.