The XRP community is ecstatic over the recent price breakout from the macro logarithmic downtrend. The sixth-largest digital asset surged to a ten-month high of about $0.58 last week but has since retracted to trade around $0.51 on Monday. However, the decline is largely due to the 300 million XRP sold by Ripple in its monthly escrow release.
According to on-chain data, Ripple returned about 700 million XRP to the escrow account over the weekend. Ripple uses XRP sales to incentivize On-Demand Liquidity programs and its RippleNet customers.
Consequently, the XRP market benefits from deeper liquidity due to increased involvement from global institutional traders.
XRP’s Future Growth Prospects
The outcome of the Ripple vs SEC lawsuit significantly impacts XRP’s future growth prospects. United States SEC Chair Gary Gensler argued during a recent hearing at the House Appropriations Subcommittee on Financial Services and General Government that all digital assets apart from Bitcoin are unregistered securities. Gensler explained that almost all crypto assets have a group of people working towards their success, thus qualifying as a security.
Related: Ripple Vs SEC: Attorney John E. Deaton Predicts Timeline For Lawsuit Outcome – Coinpedia Fintech News
XRP, ETH, and Altcoins are Not Securities
Famous crypto lawyer John E Deaton analyzed the Howey test on digital assets and explained that XRP, ETH, and any other altcoin are not securities, despite undertaking ICO during their early stages.
“When the investor in Howey bought the [mango] grove, he bought it directly from the Howey Company. If that same investor had sold the [mango] grove to a second buyer years later, a buyer with zero knowledge of the Howey company and its involvement, the subsequent sale is not of security,” Deaton noted.
His sentiments were echoed by Chief Legal Officer at Coinbase, Paul Grewal, who noted that digital assets are not investment contracts. As a result, the XRP community has pushed for Coinbase to relist the asset on its trading platform.
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