Crypto: SEC warns that XRP is driven by speculation!

The crypto market is a volatile arena where speculation plays a crucial role in determining prices. Recently, the SEC (Securities and Exchange Commission) made a statement that could change the way XRP, the crypto pegged to Ripple, is perceived. Indeed, a key document in the SEC vs. Ripple lawsuit highlights speculation as a fundamental driver of XRP’s utility and price.

Ripple SEC Crypto

Speculation drives XRP crypto utility

A document shared by Anderson, a leading figure in the XRP community, reveals an implicit acknowledgement by the SEC of the central role that speculation plays in the valuation and utility of XRP.

According to the document, taken from the ongoing lawsuit between the SEC and Ripple, speculation is not only temporarily influencing the price of XRP, but appears to be a key catalyst for it.

The SEC relies on an email sent by Ripple CEO Brad Garlinghouse in April 2017. In the email, Garlinghouse claims that the recent surge in speculative activity around XRP, as well as the increase in its price, were decisive factors for the company.

These speculative movements would create the liquidity needed to integrate XRP into Ripple's products, such as On-Demand Liquidity (ODL).

In other words, according to Garlinghouse and the SEC, speculation would be the lever that would allow XRP to generate enough volume to achieve its utility in cross-border payment solutions.

This concept, sometimes referred to as the “flywheel,” implies that speculation is not just a side effect, but an essential component of how XRP works.

An uncertain future for XRP

However, this recognition of the speculative role could also be interpreted as a structural fragility of XRP. If the very utility of the cryptocurrency depends on speculative dynamics, this raises questions about the stability of its long-term economic model.

What if speculation around XRP drastically decreased? Anderson himself questions why the SEC raised this issue in the lawsuit, suggesting that it could weaken Ripple’s position.

Some analysts believe that this reliance on speculation could make XRP vulnerable to crypto market cycles.

In times of low speculation, the token could lose liquidity, affecting its integration into products like ODL. This could also open the door to alternative solutions, such as the RLUSD stablecoin, already touted by some members of the community as a possible replacement for XRP.

However, Ripple continues to deny any intention of replacing XRP with a stablecoin in its payment solutions. Garlinghouse's Statementscited by the SEC, even suggest the opposite: speculation remains an asset to strengthen the use of XRP in its products, despite the doubts that persist.

The impact of the lawsuit on XRP performance

The approaching appeal deadline in the lawsuit against Ripple appears to be weighing heavily on XRP's current performance.

The token's price is stagnating around $0.59, with relatively low trading volumes compared to its previous peaks.

This situation reflects the general uncertainty surrounding the outcome of the trial. If Ripple loses on appeal, it could not only affect the value of XRP, but also call into question its role in the crypto ecosystem.

However, some observers remain optimistic. According to them, if Ripple manages to avoid the appeal or obtain a favorable outcome, XRP could see a rapid rise, fueled once again by speculation. In a market as unpredictable as the cryptocurrency market, speculation remains a key factor – whether it is to push the price up or keep it afloat. Meanwhile, Bitcoin remains unrivaled and Ethereum is collapsing.

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