As the Chairman of the Securities and Exchange Commission (SEC), Mr. Gary Gensler, prepares to resign, a cryptocurrency that was once targeted under his leadership is experiencing significant growth.
XRP, a cryptocurrency widely used by fintech company Ripple Labs, saw its price surge on Thursday when Gensler announced he would resign from his leadership position at the agency as President-elect Donald Trump takes over the White House in January.
As of now, the price of XRP has risen 20% over the past day, reaching a high of $1.49 this morning, the highest price since May 2021.
Although XRP has been one of the largest cryptocurrencies by market capitalization since its launch in 2013, the SEC has accused this asset of being a security in a lawsuit filed in 2020. While a federal judge ruled that this token "does not necessarily have to be a security by its appearance," regulatory uncertainty still exists, with the SEC appealing this decision.
Bitwise's Senior Investment Strategist, Mr. Juan Leon, stated that the price increase of XRP stems from hopes for a favorable regulatory environment under Trump. While the SEC has pursued Ripple Labs in court for many years, the change in leadership could bring new opportunities, depending on whether the SEC decides to abandon its four-year-long lawsuit.
"Ripple Labs and XRP have thus been embroiled in lawsuits with the SEC since 2020, which has severely hindered their business prospects," Mr. Leon remarked. "Now, with Gensler set to leave and XRP launching a stablecoin, investors are embracing a clear roadmap for XRP to fulfill its mission as a B2B blockchain payment network."
On Election Day (11/5), the price of XRP fluctuated around $0.50. However, since Trump won the election, the price of this token has nearly tripled, becoming one of the cryptocurrencies with the largest post-election increases, alongside ADA.
Ripple's CEO, Mr. Brad Garlinghouse, meanwhile, has offered advice to Trump's team, according to the New York Times. The newspaper reported last week that Mr. Garlinghouse had spoken with individuals close to the president-elect about personnel decisions under the new Trump administration.
With the change in SEC leadership likely bringing a crypto-friendly regime, investor access to XRP has recently been expanded in the US. For example, earlier this month, the investment app Robinhood listed this token for trading on its platform.
Last month, Ripple's Legal Director, Mr. Stuart Alderoty, stated that Gensler wanted to keep "a cloud of uncertainty hanging over the crypto industry" with his appeal. However, he argued that the SEC's appeal is likely to fail, dispelling that cloud of uncertainty forever.
Although the SEC has sought a $2 billion penalty against Ripple for XRP transactions, claiming the company violated securities laws, a federal judge ordered Ripple to pay a $125 million fine in August. The judge found that XRP transactions with institutions violated securities laws but not the transactions under the program that made this token available to retail investors.
Connor McGlaughlin, a YouTube influencer and XRP investor who has dedicated his Mickle Markets channel to support this cryptocurrency, stated that he believes this coin is increasing in value as concerns about its regulatory status diminish.
As the SEC lawsuit appears increasingly difficult, McGlaughlin – who has posted videos supporting XRP related to Gensler in recent days – sees new optimism among supporters of this currency.
"With the potential for a favorable resolution and the possibility of a more crypto-friendly regulatory environment under the new administration, confidence in XRP is rising," he said. "The market is waking up to this potential, driving current excitement and price momentum."
