Ripple (XRP) is the 5th largest crypto by market cap behind BTC, ETH, USDT, and BNB. In mid-October 2023, Ripple had a market capitalization of $26.6 billion.
XRP price began to rally again in mid-October after six months of hardly moving (other than a July spike that lasted about a few weeks).
Here are six major XRP price factors moving forward:
1. Tailwind: SEC Drops Charges Against Ripple Executives
Ripple tokens jumped to 6% gains on the 7-day window Thursday after markets welcomed news of an SEC retreat on two key parts of its Ripple lawsuit.
The Securities and Exchange Commission said in court papers it is dropping all claims against two key Ripple executives.
That will spare both executives a jury trial. The dropped charges leave the case down to negotiating over penalties to Ripple Labs, the SEC said in its filing.
The Wall Street Journal reported:
“The dismissal of civil claims against Brad Garlinghouse and Chris Larsen, who were sued for assisting Ripple Labs’s sales, will likely encourage wealthy crypto defendants to fight regulators in court.”
Larsen and Garlinghouse have been vociferous critics of the SEC over its lawsuit against Ripple. According to Reuters, Garlinghouse said:
“Instead of looking for the criminals stealing customer funds on offshore exchanges that were courting political favor, the SEC went after the good guys.”
The statement seemed to reference FTX exchange founder Sam Bankman-Fried, who is currently standing trial for criminal charges related to FTX and Alameda Research.
2. Headwind: Ongoing SEC Lawsuit Depresses XRP Price
XRP price made market waves in July after a US judge ruled against the SEC that Ripple tokens are not securities. But that victory was short-lived. In October, the XRP price is back down to where it was 6 months ago.
That could happen again after this month’s victories for Ripple if the SEC keeps slow-walking its lawsuit and dragging on the uncertainty about Ripple’s future.
Before the SEC dropped charges against Larsen and Garlinghouse, TheStreet recently reported that Ripple has been one of crypto’s worst-performing assets in October:
“The subdued performance of Ripple in mid-October now makes the crypto among the most poorly-performing tokens on the crypto market, wiping any gains it previously made.”
Ripple (and Binance) are easy targets for the SEC because they are not as decentralized as Bitcoin and Ethereum and have a more corporate structure. The longer the SEC fight drags on, the more tepid the waters for investors.
3. Tailwind: Ripple Investors Hope SEC Will Settle Soon
While the looming question of XRP’s regulatory status is holding back some investors, others are holding Ripple in hopes they’ll be in the money when this finally settles.
It is possible the SEC will wave the white flag once and for all very soon after all the setbacks to its case this year. Perhaps it’s even a likelihood. At least the SEC may be more ready to go ahead and settle with Ripple Lab. If and when that does happen, it will undoubtedly send XRP price surging again.
After the SEC backed down from taking the two top Ripple Labs execs to trial, the XRP price jumped from $0.49 to $0.53 on October 19. So, a final resolution to all of the SEC’s actions against Ripple will almost certainly bring the bulls back for another rally.
Given the duration and cost of the legal battles Ripple has had to fight against the SEC, there could even be a prolonged bull market for XRP to satisfy years of pent-up demand.
With a decisive outcome to the SEC’s game of cat-and-mouse, the subsequent rally would be apt to sustain longer than the July bull run.
4. Headwind: Intense Competition from Bitcoin, DeFi
Fighting for market share with a number of strategic competitors is an ongoing headwind for Ripple. In Q4 2023, the battle for crypto investors’ capital is heating up.
Based on the amount of funds raised for blockchain startups in Q3, the capital community markedly favors DeFi projects over more centralized finance blockchains like Ripple.
This DeFi vs. CeFi narrative could be an ongoing headache for cryptocurrency investors hanging their hats on the XRP price. (More on fundraising and Ripple in price factor #7 below.)
Meanwhile, Bitcoin’s dominance or market share of 51% in the crypto industry is at a 31-month high.
More than a year of headline news favoring Bitcoin’s decentralized network in both industry-focused and mainstream outlets is a headwind for CeFi companies like Ripple and Binance.
5. Tailwind: Positive Market Signals for XRP Price
While XRP price traded down some 3% for the 6-month period ending just before this week’s SEC retreat, trading on crypto exchanges had already begun to break upward.
Before the latest victory in the SEC lawsuit, XRP had just recently gained 2.6% in average crypto exchange prices over a 5-day window.
That put Ripple’s price a notch above even for the previous 30 days. Moreover, the accumulation of Ripple whale addresses portends a possible recovery in the near future.
6. Headwind: Ripple Labs Gluts Bitstamp with XRP
Despite the good news and strong technical signals for Ripple this week, a whale-sized chunk of XRP tokens recently sent to Bitstamp could overload the market with supplies.
Ripple Labs sent over 30 million XRP to the crypto exchange earlier this month. That could over-stuff the market with XRP supply and cause a headwind for the Ripple price if the company intends to sell it.
It could be possible that Ripple is getting ready to sell those XRP tokens for cash to pay any fines incurred in a ruling or settlement with the SEC.
7. Tailwind: Possible Ripple IPO in The Works
Ripple Labs could be going public with an IPO and become a Wall Street traded company. That would bring renewed interest, fresh capital and business alliances, and a ton of earned media attention.
While there has been little in the way of official validation for them, rumors of a Ripple IPO are all over crypto Twitter (X.com) this week. That would bring in a potentially enormous amount of institutional and mainstream capital and greatly expand the Ripple ecosystem’s overall balance sheet.