XRP is the cryptocurrency at the heart of Ripple’s payments platform. “We’re optimistic that this will certainly be resolved in 2023, and maybe the first half… So we’ll see how it plays out from here,” Garlinghouse remarked on CNBC’s “Squawk Box Europe”. “I feel very good about where we are relative to the law and the facts”.
Ripple and the SEC both submitted their final round of briefs in December. Both accused the other of act outside of the law. The two parties now await a summary judgment. The judge presiding over the case could opt to rule in favor of either side or to take the case to trial.
Garlinghouse reiterated that Ripple still wants to settle the case. “We have always said that we would love to settle, but it requires one very important thing, and that is that, on a go-forward basis, it’s clear that XRP is not a security,” the CEO of Ripple remarked.
But Garlinghouse isn’t optimistic that Ripple will be able to settle the case. That’s because SEC Chairman Gary Gensler has repeatedly remarked that he views nearly all cryptocurrencies as securities. The only cryptocurrency that the SEC and Gensler has explicitly stated that they do not view as a security is Bitcoin, owing to its decentralization and fair initial distribution.
Gensler has even hinted that crypto-staking mechanisms, used by popular blockchains such as Ethereum, Cardano and Solana, should count as security offerings.
XRP to $1 on Positive Lawsuit Outcome?
Should the judge rule in favor of Ripple in the coming months, or Ripple settle with the SEC in a manner that declares XRP as “not a security”, some think that XRP could rally to $1.0 per token or higher, some analysts think.
The risk that XRP could be labelled a security is a key risk to Ripple’s global business expansion, which is the primary driver of XRP adoption. If this cloud of uncertainty is lifted, deterred buyers could come flooding back in.
Many expect 2023 to be a better year for crypto given rising expectations that falling inflation and slowing growth force the Fed to pause and even reverse rate hikes later this year. This could help lift XRP back to September highs in the $0.55 area in the coming months.
A positive SEC ruling could then be the catalyst required to launch XRP above $0.55 resistance, above $0.90ish 2022 highs and towards late 2021 levels in the $1.30-40 area.