No one knows for sure how the ongoing Ripple Labs (CCC:XRP-USD) and U.S. Securities and Exchange Commission (SEC) battle will end, or when.
There are presently many indications that the outcome will favor Ripple. I’ll get into those in a bit, but first I’d like to note that despite trouble on multiple fronts, XRP has fared well throughout the year.
XRP is still up 55% over the last six months despite the SEC’s incessant argument that Ripple sold XRP tokens as unregistered securities.
Greater Gravity
Further, XRP remains up YTD, despite the gravity exerted by cryptocurrency leaders Bitcoin (CCC:BTC-USD) and Ethereum (CCC:ETH-USD).
It’s no secret that as Bitcoin and Ethereum go up, so too does the broader crypto market. That’s important because Bitcoin has shed some $20k of value since the second week of November, dropping from $67k to $47k. That’s a 30% decline for Bitcoin, while XRP has also declined, falling approximately 23% from the second week of November to today.
Again, the point here is that Ripple and XRP seem to be holding up well despite the unfavorable macroenvironment. So, for those who believe Ripple will be vindicated in its suit with the SEC, 2022 could be a very strong year for XRP’s prospects.
Ripple Chief Executive Officer (CEO) Brad Garlinghouse has believed all along that his firm would be vindicated. Not long ago, he noted that he believes 2022 will see the SEC suit conclude.
Slow Moving
Ripple vs. SEC is a seminal case in the regulation of cryptocurrency. “Clearly we’re seeing good questions asked by the judge. And I think the judge realizes this is not just about Ripple, this will have broader implications,” noted Garlinghouse.
A global regulatory framework has begun to emerge. Countries including China and India have taken harsher stances against crypto, increasing regulatory oversight within their respective borders. Meanwhile, countries including The United Arab Emirates, Japan, Switzerland, and Singapore have led with regulatory frameworks that grant crypto more autonomy.
The U.S. argument surrounding regulation is heating up and the Ripple outcome will be integral to the future of domestic crypto.
There are current signs that XRP will move upward outside of CEO Brad Garlinghouse’s optimism.
Whales
In the stock market, it is often institutional investors who exercise what could be characterized as outsized influence. Institutional investors control massive amounts of capital and other resources. Thus, they have the ability to dictate the movement of individual stocks within the market.
In the world of crypto, their counterparts are known as ‘whales.’ They have vast resources at their disposal. When they direct large amounts of capital toward a specific crypto, the result is similar to what institutional investors exercise over stocks.
In the case of XRP, that suggests future upward movement. That’s because since September, XRP whales have increased their XRP holdings by 6%. They now control some 3.31 billion XRP with whales being defined as addresses with $1 million to $10 million in XRP.
Ripple Utility
Remember, XRP has utility as a cross-border payment token. XRP is a distributed ledger database — not blockchain — enabling instantaneous global transactions.
In essence, XRP can be thought of as a potential successor to legacy payment systems including SWIFT, a “global provider of secure financial messaging services.”
What to Do With Ripple
The more one reads about Ripple and XRP, the more one believes in the project. I mean that as it relates to the SEC battle, firstly.
Almost all of the news coming out about the case seems to favor Ripple. That has been evident since the early arguments.
It seems to be more of a question of when Ripple will receive a favorable judgment, rather than if they will. Brad Garlinghouse is confident that it will occur sometime in 2022. The point is that XRP is nearly certain to rise in the future. There are more attractive crypto investments out there in terms of return.
After all, XRP isn’t going to rise as quickly as some of the speculative bets in the space. However, it provides a much greater likelihood of providing returns, which shouldn’t be overlooked.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
