Why Is XRP Down After a Year of Growth?
If you're an XRP (CRYPTO: XRP) investor, the good news is that Ripple Labs (the company behind the XRP token) is finally starting to put its legal and regulatory issues in the rearview mirror. As a result, new opportunities for expansion in the U.S. market are starting to open up, and XRP is headed into 2025 with new momentum and new optimism.
The bad news, however, is that the market performance of XRP has not reflected that. In fact, XRP is down about 5% for the year. That might not sound tragic, but a number of top cryptocurrencies, led by Bitcoin, are up 50% or more for the year. So the obvious question becomes: Why is XRP continuing to underperform the rest of the industry?
Legal and regulatory risk
The best answer is that Ripple may not be as free and clear of regulatory issues as people would like to think. In August, a long-running court case involving the Securities and Exchange Commission (SEC) finally wrapped up, with Ripple agreeing to pay $125 million in penalties for improperly selling XRP tokens to institutional investors. In theory, that should have cleared the deck of any future legal or regulatory liability, and enabled Ripple to get back to business as usual.
But the SEC has until early October to appeal the case, and if it does, it could complicate matters. That might explain why the price of XRP did not rise more in August, as many investors expected. Many thought XRP would double in price to $1, but thus far, that hasn't happened. Instead, investors are sitting on the sidelines, waiting to see what happens next.
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