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SHOULD YOU INVEST IN XRP?
After a 350% bull run in November followed by a +60% drop in Decemberβ¦ πͺπππ§'π¦ π‘ππ«π§ for XRP?
10X to a new all time high? A collapse to near zero? ππ’π§π ππ₯π π£π’π¦π¦ππππ!
Letβs 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 βXRPβ as an π¨π‘π₯ππππ¦π§ππ₯π π¦πππ¨π₯ππ§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©ππ₯π§π¨ππ ππ¨π₯π₯ππ‘ππ¬. Ripple CEO - Brad Garlinghouse has confirmed that they will be appealing the SECβs decision in court by saying:
βπ»ππ πΊπ¬πͺ ππ ππππππππππ πππππ ππ πππ πππππ πππ πππ πππ πππ ππ πππ ππππππ πππ ππ ππππ ππππππππππ πππππππ ππππππ π πππππππ ππππ-ππππ ππ."
However, The SEC claims to have a water tight case against Ripple citing such issues including:
β‘ Ripple has sold XRP widely into the market specifically to individuals who have π‘π’ 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.
β‘ Rippleβs ππ«π£ππ‘π¦ππ¦ 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 Rippleβs revenues have come from its sales of XRP.
β‘ Ripple incentivised trading platforms and paid $70m worth of XRP to use the token. The company also sold XRP to ππ‘π¦π§ππ§π¨π§ππ’π‘π¦ at 5-30% discount vs the public market (where these XRP token were eventually offloaded to).
β‘ The "XRP Army" continue to use the expression ππ’ππ 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 & Itβs likely that weβll see more investment platforms remove XRP (at least temporarily) as they look to avoid πππππ π§π₯π’π¨πππ whilst Rippleβs 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’ππ§ππ₯ π¦π§ππ‘ππ!
Even if new Chairman Roisman picks up from where Clayton left off, The SECβs complaint only "πππππππ¦" that XRP is a security and does not guarantee that Ripple wonβt win when they meet in court! In fact, Ripple has a solid case of itβs own including:
β‘ In 2015, the π¨π¦ ππ’π©ππ₯π‘π ππ‘π§ concluded that XRP was indeed a virtual currency!
β‘ Ripple has π¦πππ₯πππ’ππππ₯π¦, If people want to invest in Ripple they do not buy XRP but rather shares in Ripple.
β‘ 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 πππ ππππ‘π 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 πππ’πππππ¬ and therefore the SECβs case alone would not necessarily send XRP to zero!
in fact, 90% of XRPβs π§π₯ππππ‘π π©π’ππ¨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 donβt be surprised by the π¦πππππ‘π π£π₯ππ¦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 πππππ§ π’π ππ§π¦ ππππ! BUT if they can take on the SEC and win β this validation will send Ripples around the globe and the π«π₯π£ ππ₯π π¬ πͺπππ ππ ππππ ππ‘ ππ’π₯ππ!
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