Despite the blow suffered by most of the crypto market, XRP continues to trade in the green on higher timeframes. The token is in a battle between the U.S. Securities And Exchange Commission (SEC) and payment company Ripple.
This legal battle began two years ago but has become more relevant than ever as the regulator crackdown on the nascent sector. The event has attracted speculators and traders looking to profit from its outcome.
With the SEC filing two new lawsuits against crypto exchanges Binance and Coinbase, XRP could benefit from a positive result, and other tokens could record a positive correlation. In other words, if XRP wins in court, other tokens will follow a similar trajectory.
As of this writing, XRP trades at $0.52 with a 2% loss in the last 24 hours. In the previous week, the token recorded a 3% profit as the market collapsed, with Binance Coin (BNB), Cardano (ADA), and Solana (SOL) experiencing sharp corrections.
Trading The SEC War, Why XRP Is Key
The SEC’s lawsuits put Binance Coin (BNB), Cardano (ADA), and many more coins under the spotlight. These cryptocurrencies could be deemed securities in the United States, thus rendering most crypto exchanges unable to offer them for a while.
Binance.US has begun pausing trading on this and other “crypto asset securities,” as the regulator calls them. As a result, their prices have been suffering and could continue to see downside pressure in the short term.
According to pseudonym analyst Daan Crypto, some of the tokens targeted by the SEC could rise again to benefit those traders willing to take the risk. Via Twitter, the analyst wrote:
I think there might be some smart people that know whether these coins will come out on top or not and might get some amazing discounts. I’d rather choose the easy route (Left side of the bell curve) and trade other coins for the foreseeable future.
The analyst recommended that traders stick to Bitcoin and other “dino coins,” such as Litecoin. These digital assets already have a clearer status than newer cryptocurrencies, as the SEC and other regulatory bodies in the U.S. hinted at BTC being a commodity under their laws.
On higher timeframes, when the Ripple versus SEC case is finally settled or decided, XRP and other altcoins are likely to rally:
If Ripple wins then expect some massive rallies in basically every alt coin that got named as a security by the SEC. Cheer for $XRP even if you don’t like the project itself. They are fighting everyone’s fight here.
The fate of this case could be decided soon, according to top executives within the payment company. In the meantime, traders could see some profits by taking positions on older coins.
Cover image from Unsplash, Chart from Tradingview