SHOULD YOU INVEST IN XRP?



After a 350% bull run in November followed by a +60% drop in December… π—ͺ𝗛𝗔𝗧'𝗦 π—‘π—˜π—«π—§ for XRP?


10X to a new all time high? A collapse to near zero? 𝗕𝗒𝗧𝗛 𝗔π—₯π—˜ π—£π—’π—¦π—¦π—œπ—•π—Ÿπ—˜!

Let’s quickly discuss which is more likely!



THE NEGATIVE:


Ripple has been charged with conducting investments without proper licences by the US Securities and Exchange Commission. The SEC is suing the San Francisco based payments company for selling the cryptocurrency β€œXRP” as an 𝗨𝗑π—₯π—˜π—šπ—œπ—¦π—§π—˜π—₯𝗗 π—¦π—˜π—–π—¨π—₯π—œπ—§π—¬.


The SEC is claiming that Ripple's XRP token is in fact a tradable asset, known as a security, and thus subject to its regulations.


Ripple denies this claim, maintaining their belief that XRP is nothing more than a π—©π—œπ—₯π—§π—¨π—”π—Ÿ 𝗖𝗨π—₯π—₯π—˜π—‘π—–π—¬. Ripple CEO - Brad Garlinghouse has confirmed that they will be appealing the SEC’s decision in court by saying:


β€œπ‘»π’‰π’† 𝑺𝑬π‘ͺ π’Šπ’” π’„π’π’Žπ’‘π’π’†π’•π’†π’π’š π’˜π’“π’π’π’ˆ 𝒐𝒏 𝒕𝒉𝒆 𝒇𝒂𝒄𝒕𝒔 𝒂𝒏𝒅 𝒕𝒉𝒆 π’π’‚π’˜ 𝒂𝒏𝒅 π’˜π’† 𝒂𝒓𝒆 π’„π’π’π’‡π’Šπ’…π’†π’π’• π’˜π’† π’˜π’Šπ’π’ π’–π’π’•π’Šπ’Žπ’‚π’•π’†π’π’š π’‘π’“π’†π’—π’‚π’Šπ’ 𝒃𝒆𝒇𝒐𝒓𝒆 𝒂 𝒏𝒆𝒖𝒕𝒓𝒂𝒍 𝒇𝒂𝒄𝒕-π’‡π’Šπ’π’…π’†π’“."


However, The SEC claims to have a water tight case against Ripple citing such issues including:


⚑ Ripple has sold XRP widely into the market specifically to individuals who have 𝗑𝗒 π—¨π—¦π—˜ for XRP. Despite Ripple touting potential future uses of XRP for specialised institutions, no such methods of exist today for individual investors.


⚑ Ripple’s π—˜π—«π—£π—˜π—‘π—¦π—˜π—¦ reached $275m for 2018, yet sales for their two software suites xCurrent & xVia only earned the business $23m up until 2019. Ripple did earn over $250m in equity sales from 2016-18 however the majority of Ripple’s revenues have come from its sales of XRP.


⚑ Ripple incentivised trading platforms and paid $70m worth of XRP to use the token. The company also sold XRP to π—œπ—‘π—¦π—§π—œπ—§π—¨π—§π—œπ—’π—‘π—¦ at 5-30% discount vs the public market (where these XRP token were eventually offloaded to).


⚑ The "XRP Army" continue to use the expression π—›π—’π——π—Ÿ on Social Media platforms. The SEC believes this shows proof that holders of XRP are treating their tokens like an investment and not a utility.


some crypto exchanges have already began to delist XRP & It’s likely that we’ll see more investment platforms remove XRP (at least temporarily) as they look to avoid π—Ÿπ—˜π—šπ—”π—Ÿ 𝗧π—₯π—’π—¨π—•π—Ÿπ—˜ whilst Ripple’s lawyers battle it out in court!


THE POSITIVE:


SEC chairman Jay Clayton coincidently resigned on Wednesday just days after his recent action against Ripple! Under the watch of Mr Clayton, the SEC has been strictly against cryptocurrencies however new Interim Chairman Elad Roisman may well take a π—¦π—’π—™π—§π—˜π—₯ π—¦π—§π—”π—‘π—–π—˜!



Even if new Chairman Roisman picks up from where Clayton left off, The SEC’s complaint only "π—”π—Ÿπ—Ÿπ—˜π—šπ—˜π—¦" that XRP is a security and does not guarantee that Ripple won’t win when they meet in court! In fact, Ripple has a solid case of it’s own including:


⚑ In 2015, the 𝗨𝗦 π—šπ—’π—©π—˜π—₯π—‘π— π—˜π—‘π—§ concluded that XRP was indeed a virtual currency!


⚑ Ripple has 𝗦𝗛𝗔π—₯π—˜π—›π—’π—Ÿπ——π—˜π—₯𝗦, If people want to invest in Ripple they do not buy XRP but rather shares in Ripple.


⚑ The SEC has allowed investors to trade XRP for 8 years. Their opportunity to label XRP a security has long passed and now that there are so many holders of the token - It would be far too π——π—”π— π—”π—šπ—œπ—‘π—š to thousands of investors if they were to change their stance!


Even if Ripple were to lose in court and the US permanently labelled XRP a security, the token is use π—šπ—Ÿπ—’π—•π—”π—Ÿπ—Ÿπ—¬ and therefore the SEC’s case alone would not necessarily send XRP to zero!


in fact, 90% of XRP’s 𝗧π—₯π—”π——π—œπ—‘π—š π—©π—’π—Ÿπ—¨π— π—˜ occurs outside of the US. Unfortunately, Ripple stands to lose more than just a 10% reduction in its total addressable market with the company fighting to protect its reputation!


SUMMARY:


Expect a lot of negative headlines about Ripple & XRP over the next few months and don’t be surprised by the π—¦π—˜π—Ÿπ—Ÿπ—œπ—‘π—š 𝗣π—₯π—˜π—¦π—¦π—¨π—₯π—˜ that this will create! Exchanges will likely freeze your ability to buy XRP, whilst many investors will no doubt panic and sell their tokens before a verdict is reached by the US government.


Ripple is about to have the π—™π—œπ—šπ—›π—§ 𝗒𝗙 π—œπ—§π—¦ π—Ÿπ—œπ—™π—˜! BUT if they can take on the SEC and win – this validation will send Ripples around the globe and the 𝗫π—₯𝗣 𝗔π—₯𝗠𝗬 π—ͺπ—œπ—Ÿπ—Ÿ π—•π—˜ π—•π—”π—–π—ž π—œπ—‘ 𝗙𝗒π—₯π—–π—˜!



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Disclaimer: All trading involves risk. Only invest money that you can afford to lose and remember that past performance doesn’t necessarily guarantee future results. Everything posted by me is for educational purposes only. I am not a financial advisor and no information on this website or any accounts linked with myself should be considered as financial advice. Remember, all trades are at your own risk. 

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