- Deaton highlights a 2018 internal memo where SEC’s enforcement lawyers did not label XRP as a security.
- Ripple’s XRP currently undervalued amidst a bearish sentiment, but price may surge if long-term holders continue to hold.
In a startling revelation, John E Deaton, Founder of Crypto-Law.us and Managing Partner of the Deaton Law Firm, pointed out an unexpected twist in Ripple’s ongoing legal tussle with the U.S. Securities and Exchange Commission (SEC). Deaton, an acknowledged blockchain enthusiast and lawyer, referred to a 2018 internal memo which might just shift the winds in Ripple’s favor.
To be clear, I didn’t say the memo concluded XRP is not a security. The memo was found to be privileged and not disclosed so I haven’t read exactly what it says. But Judge Netburn found it important to note that the authors of the memo, who were Enforcement lawyers at the SEC,…
— John E Deaton (@JohnEDeaton1) August 27, 2023
SEC’s 2018 Memo and Ripple’s Legal Position
The undisclosed 2018 internal memo by enforcement lawyers at the SEC did not recommend any action against Ripple over the sale of its XRP tokens. This signifies that, at that time, these lawyers did not firmly categorize XRP as a security. It’s crucial to question, as Deaton does, how Ripple executives could have possibly known they were potentially violating security laws if even the SEC lawyers weren’t sure.
This development follows Bill Morgan, a legal expert’s critique on the SEC’s viewpoint of the intrinsic value of digital assets, notably XRP. Morgan argues that the SEC’s attempt to differentiate digital assets from commodities, like gold, due to a supposed lack of intrinsic value is overly simplistic. He contends that the value of a digital asset can indeed originate from its functionality and applications, a fact the SEC might be overlooking.
XRP’s Price Amidst Market Turbulence
Despite Ripple’s ongoing legal confrontations and the recent downturn in the crypto market on August 17, XRP’s price remains resilient, currently hovering below $0.55. A prominent on-chain indicator indicates that the current bearish market sentiment might be a primary factor restricting XRP’s price breakout. In fact, the XRP Network Value to Transaction Volume (NVT) ratio surged by a staggering 340% within a week, implying an increasing economic activity relative to its price downtrend.
Signs of a Potential XRP Price Breakout
The NVT ratio’s increase suggests external factors, like market speculations, are potentially pushing XRP’s price down. Given XRP’s perceived undervalued status, there’s a possibility of a substantial surge in its value if the market sentiment becomes bullish. This is further reinforced by the observed trend of XRP holders, particularly long-term partners and investors, showing reluctance in selling at the current rates.
Further bolstering the hope for XRP enthusiasts, the XRP Mean Coin Age metric has shown a 10% uptick. This data, derived from the average number of days coins have been stationary in their wallets, indicates an increasing reluctance among holders to sell.
If the ongoing transactional activity intensifies and more long-term investors hold onto their XRP, we could see a 20% rise in its price. A similar sentiment is reflected in the Market Value to Realized Value (MVRV) ratio, suggesting a potential price surge. However, with prices at around $0.52, any slip below $0.45 might give the bears an upper hand, posing risks of the price dropping further.
In this ever-evolving landscape, Ripple’s XRP continues to be a significant point of interest for crypto enthusiasts and investors, especially with the recent legal revelations and market activities pointing towards possible unexpected outcomes.