Ripple in death spiral – Coinbase stops trading XRP
Ripple is facing a potential disaster with XRP. Since the SEC’s announcement of action against Ripple, many of the company’s partners have bailed out, distancing themselves from XRP and in some cases withdrawing from the exchanges. The SEC has initiated proceedings accusing Ripple and BitQT initiators, Chris Larsen and Brad Garlinghouse, of selling an unregistered security and manipulating the market. No less than USD 1.3 billion is at stake.
Ripple and XRP are in trouble
The official announcement by the SEC has spread like wildfire in the community. As a result, the XRP price has plummeted and there is no end in sight. Since the peak at the end of November, the Ripple price has plummeted by more than 70%. In the Bitcoin exchange pair even by more than 80%.
The sharp drop was mainly associated with various exchanges that have withdrawn XRP for certain regions or altogether. Yesterday, the largest American exchange – Coinbase – also announced that it was halting trading in XRP for the time being. As a result, the Ripple price plummeted even further.
At the moment, it is not yet clear what lies ahead for Ripple and the two initiators. It is quite possible that a large fine will have to be paid but that XRP will not be classified as a security.
On the other hand, there is still the danger that XRP will be classified as a security. Such a decision would not only be dramatic for the further price development, but also for Ripple itself. After all, the company still lives from the regular sales of its own XRP. This would mean that the SEC would cut off Ripple’s money supply.
Ripple facing extinction?
Although the XRP ledger runs relatively independently of Ripple itself, without the company behind it, with the various software solutions where XRP is used, the XRP ledger will die in the long term or at least become increasingly irrelevant.
Without Ripple and all the partners, there is no need for a bridge currency that is highly volatile, dependent on the Bitcoin exchange rate, largely in the hands of a company and created at the push of a button. We already have more than enough of such cryptocurrencies and none of them represent a revolution or anything like it.
The dream of a global means of payment or bridge currency for international payments is currently off the table. There is little hope that the tide will turn for Ripple in the near future.
Moreover, even one of Ripple’s most important partners – MoneyGram – has distanced itself from Ripple and XRP.
Currently, one can only wait and warn all investors. There is currently little hope for a recovery in the near future. The process could drag on for weeks or months and drive the price further and further down.
As always, we will keep you up to date and inform you as soon as there is something new regarding the process.