With so much confusion in the market regarding XRP and Ripple, investors have a question: “Should I buy, sell or hold XRP?” As you know, it all started with the SEC case.
Ripple and. SEC: Case
The SEC’s lawsuit against Ripple and its two executives – Chris Larsen and Brad Garlinghouse – is currently the trending topic. Michael Saylor’s bitcoin portfolio, more bitcoin buying institutions, etc. in front of him. Many mainstream media also covered this news.
As the news broke out, the price of XRP started to decrease. At the time of writing, XRP has dropped -16.7% in the past 24 hours, losing its position as the third largest cryptocurrency in the world in terms of market capitalization.
The lawsuit against Ripple stems from the SEC’s view of XRP as a security, and what Ripple has done since 2013 was “selling unregistered securities”, a punishable crime.
Without going into details, let’s look at a few scenarios for what might happen in front of us.
What if the SEC wins?
This means that XRP is an unregistered security, and most exchanges cause the price decline to continue. Ripple will be fined heavily, and Garlinghouse and Larsen will likely be sent to jail. However, this is unlikely and could be a solution that leads to more fines.
Finish the game? XRP loses its value drastically; Ripple’s partners will likely stop using their ODL, which uses XRP to transfer funds and provide liquidity.
If Ripple wins
This causes the price of XRP to rebound and continues as usual. The price will initially result in a wave of tweets saying “I told you” from the XRP army to FOMO and a second surge.
It’s hard to predict who will prevail at the time of writing. However, in the current scenario, companies related to Ripple or XRP will be in trouble. Bitwise and many such companies are already moving away from XRP. Depending on where the case is going, users / companies can either reheat to XRP or abandon it forever.
As seen in the chart above, the worst is over as the price touched the 0.786-Fibonacci level. Perhaps in the short term, we can expect it to move this level hesitantly until more news emerges.
Depending on this development, the price can determine its new direction. In the short term, if things go bad for Ripple or XRP, it is inevitable that XRP will hit a 2020 low.