Ripple (CCC:XRP-USD) crypto could rebound quite significantly if Ripple Labs, Inc. — the private, for-profit company based in San Francisco — ever settles with the Securities and Exchange Commission. I wrote about the company’s tenuous relationship with XRP crypto last month, as well as its fight with the SEC.
Recently, Ripple Labs earned some minor victories in this struggle, including a recent ruling on June 1. A court denied the SEC access to Ripple Lab’s legal interactions with Ripple’s own attorneys. This was a clear case of protection of attorney-client privilege. In fact, one legal analyst made a prediction about the ramifications of the ruling. He said that if Ripple won the ruling (which it later did), the SEC case could end up getting settled.
However, the markets probably don’t care who wins. They just want it to be resolved. In the long run, XRP crypto will likely rebound quite significantly once this regulator-crypto scuffle is over.
Moreover, it looks like subsequent events show that the case is going to drag on until 2022. For example, Decrypt.co recently put forward the various dates that each side has to deliver documents or when various hearings are set.
Where This Leaves XRP Crypto
XRP crypto has had a rough several weeks ever since it peaked at $1.8392 on April 13, given that it was at 68.1255 cents per token on June 24. This represented a drop of 63% from its peak. But never mind. Even at that price, XRP is still up 187% year-to-date from its price on Dec. 31 of 23.7444 cents per XRP token.
Here is what this means. If XRP crypto regains just half of its previous drop (i.e., 57.8972 cents), XRP would reach $1.26. That represents a potential climb of 85% per token. In other words, the possibility of even a 50% recovery provides an 85% ROI for new investors in XRP.
And that could easily happen if Ripple Labs and the SEC decide to settle. I suspect the only way Ripple Labs will do that, though, is if whatever cost the SEC wants to levy on the company is not too onerous. It wants to continue to make money, including promoting XRP crypto, and be able to use the money it has already raised.
To be sure, there is no hint that any kind of settlement is in the works now. If anything, the lawsuit looks like it will keep on dragging on well into 2022. Therefore, investors will likely have a chance to average into XRP crypto for at least the next six months before the crypto makes a big spike.
What To Do With XRP Crypto
What we have here is a highly speculative cryptocurrency that is partially dependent on a resolution of a lawsuit. That should give pause to potential investors in XRP crypto.
Ripple Labs developed the XRP blockchain to facilitate cross-border payments between banks around the world. There is no mining or validation of the blockchain through a proof-of-work system that requires digital mining of XRP crypto. Ripple distributed all of the XRP tokens to itself, its founders, and its clients.
As I explained in my last article, Ripple Labs sells software to banks. Just one product involves XRP the cryptocurrency to facilitate cross-border payments. It is not nearly as popular as Ripple Lab’s other software products.
So, for better or worse, XRP crypto is going to live and die on the resolution of this lawsuit. Expect the crypto to be very volatile as a result. But the odds are that by this time next year, XRP will be significantly higher.
On the date of publication, Mark R. Hake did not hold a position in any security mentioned in the article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.