Crypto bulls celebrated a victory, or a partial one anyway, earlier this month. The U.S. District Court in the Southern District of New York ruled on July 13 that Ripple Labs’ token is not considered a security when it is sold to individual investors. However, U.S. District Judge Analisa Torres said it is a security when sold to institutional investors. The case, which was brought by the Securities and Exchange Commission (SEC) in late 2020, could set a precedent for how other cryptocurrencies are regulated and has investors interested in the best cryptos post-Ripple decision.
While the SEC could file an appeal, Ripple Labs’ chief legal officer, Stuart Alderoty, said the blockchain company is ready and that further challenges could amplify its victory, Cointelegraph reports.
Below are three high-potential cryptos to consider after the Ripple verdict.
XRP (XRP-USD)
The most obvious of the cryptos benefiting from the Ripple decision is XRP (XRP-USD). This is the cryptocurrency that was created by Ripple Labs and was the subject of the SEC lawsuit, which alleged that Ripple violated securities laws by selling the token to investors without registering it as a security.
Immediately following Judge Torres’ ruling, the price of XRP shot up, rising from $0.47 on July 12 to a high of nearly $0.89 on July 13 and finishing the day up around 73%. While XRP has given back some of those gains, it remains up nearly 50% since the decision.
Some are calling for cryptocurrency to hit the $1 level by year-end in the wake of the court decision. That would represent a gain of more than 40% from the current level. And if XRP manages to rise to $9 by the end of the decade, as some are predicting, those who get in now could see a return on investment of more than 1,000%.
Granted, a lot needs to go right for XRP and Ripple between now and then to make that a reality, including more network activity and increased adoption by financial institutions, as well as increased regulatory clarity and a broader crypto bull market. But the recent court decision was a big step in the right direction.
Bitcoin (BTC-USD)
You can’t have a discussion about the cryptos benefiting from the Ripple decision without looking at the most widely accepted and widely held cryptocurrency, Bitcoin (BTC-USD). This is despite the fact that Bitcoin is not considered a security by the SEC.
As Reuters reports: “Bitcoin is not considered a security because its anonymous and open-source origins mean investor profits are not dependent on the efforts of developers or managers, said Carol Goforth, a law professor at the University of Arkansas.”
This might help explain why, after initially jumping as much as 5% following the court’s decision in the Ripple Labs’ case, BTC has given back all of its gains and then some. It currently sits about 4% below where it traded on July 12. Yet, this is not necessarily cause for concern. Bitcoin has been on a tremendous run this year, up nearly 77% so far in 2023.
If subsequent court rulings go in the crypto market’s favor, they are likely to spur increased investor interest in digital assets. And as the most established cryptocurrency, plenty of those dollars should flow Bitcoin’s way.
Monero (XMR-USD)
Monero (XMR-USD) is a cryptocurrency lauded for its privacy features, as payments made through Monero’s network are untraceable. While many believe this is true of Bitcoin, that’s not the case. Bitcoin transactions and those of many other digital currencies are traceable.
Meanwhile, as Forbes reports, “Payments on the XRP ledger are pseudo-anonymous, in the sense that everybody can see the amount being sent, what account sent it and what account received it, but not who the owner of the accounts are.”
Monero’s robust privacy features make it a go-to for investors concerned with user anonymity and continued regulatory risks.
XMR hit a high above $170 in the week following the Ripple decision but has since pulled back. Some may argue that anonymity matters less now than it did before the ruling. However, the regulatory road for the crypto industry is likely to be long and potentially winding.
That certainly makes Monero one of the cryptos to watch after the Ripple case.
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.
