Despite the huge and ugly lawsuit pending against Ripple, the company’s cryptocurrency XRP has recently incurred a massive gain following news that Tesla has purchased approximately $1.5 billion worth of bitcoin, the world’s leading digital asset by market cap. The news suggests that all smaller altcoins still move in tandem with BTC and have yet to find their own footing in the growing world of digital currency.
Ripple Shoots Up
Following the purchase, XRP rose as much as 15 percent before taking a small step backwards. At the time of writing, the fourth-largest digital currency by market cap is trading for a little over 50 cents per unit, though there’s still a way to go if it’s ever going to reach its all-time high of more than $3 again.
Ripple is currently facing one of the largest digital currency-based lawsuits in the history of the space. The Securities and Exchange Commission (SEC) – a governing financial body that regulates the distribution and trading of securities – has deemed that the 2013 token sale Ripple hosted for XRP was invalid and violated present regulations given that XRP was not registered as a security.
The SEC has shown in recent years that it isn’t messing around, and it will take down all companies that seek to disobey or work around its rules. Ripple is no exception, having become the latest victim of the agency’s wrath. Following the news of the suit filing, the asset XRP began shedding its value faster than a snake sheds its skin, though Ripple is not backing down.
The company’s CEO Brad Garlinghouse insists that XRP is not a security and has been recognized as a valid currency amongst many leading financial institutions in both the United States and abroad. He claims that the SEC’s information is incorrect, and he’s working to get the lawsuit dismissed.
In addition to XRP losing value, several cryptocurrency exchanges and trading platforms such as Coinbase announced following the lawsuit that they would no longer allow XRP trading going forward, saying that permitting such trades would be too risky for investors.
An Effect of Bitcoin’s Recent Surge?
It seemed like all hope was lost for the company and for XRP, though now that bitcoin has clearly caught the attention of leading tech firm Tesla, it looks like it can ride the positivity train – at least for a little while. Craig Erlam of Oanda fame said in a recent interview:
It does appear that Ripple, like many others, are riding the bitcoin wave. Although it is significantly outperforming so far today, it does have a lot of lost ground to make up, so perhaps that may explain why it’s being targeted. There doesn’t seem to be much else behind the moves, which should always be a concern, but that doesn’t mean it can’t make significantly more gains, as we’ve so often seen.