It has inarguably been a tough week for the world’s former third-most capitalized digital asset – Ripple (XRP), which has since fallen back to its previous spot after news of its $1.3 billion lawsuit the US Securities and Exchange Commission (SEC) were confirmed. As if the impending battle with the SEC was not bad enough, XRP’s price expectedly took a severe hit, crashing 33% in the last 24 hours.
XRP hit a multi-year high of $0.76 this month after a significant surge as Bitcoin recorded breaking through multiple all-time-highs in the same period, according to CoinMarketCap. Prices have dropped to a low of $0.22, as the coin shows signs of returning to its pre-November gains. It is currently trading at $0.27.
The drop sent XRP from third place to fourth in terms of market capitalization, barely a month after it finally eclipsed Tether (USDT) for the spot.
This is in addition to multiple firms and exchanges dropping the XRP token or XRP-related products, which will likely send its price spiralling uncontrollably downwards in the upcoming weeks.
As the SEC’s filing is founded on the basis of XRP’s status as a security token, any US-based crypto exchange or funds that deal in XRP are potentially at risk. So far, smaller exchanges such as OSL, CrossTower and Beaxy have suspended XRP-related transactions, at least until further headway is made by Ripple into the lawsuit. Hedge funds are also following suit, with the Bitwise 10 Crypto Index Fund having liquidated all its XRP holdings barely 24 hours after the charges were revealed.
“The Bitwise 10 Crypto Index Fund does not invest in assets that are reasonably likely to be deemed securities under federal or state securities laws. Bitwise’s decision to liquidate its position in XRP was based on consideration of new public information from the SEC’s complaint,” reads the press release.
Galaxy Digital, the investments firm founded by well-known crypto advocate Mike Novogratz, has halted all market making activity related to XRP as well. Other notable funds, such as Grayscale Investments, are expected to do the same soon.
