XRP continues to sink in value following the rolling news that more crypto exchanges are deciding to halt trading the digital asset.
On December 22nd, the Securities and Exchange Commission (SEC) revealed an enforcement action targeting Ripple that alleges the sale of $1.38 billion in unregistered securities in the distribution of XRP. The SEC lawsuit had been rumored for weeks prior to the public announcement. One industry insider said it “Ripple, the company, may be insolvent by the end of 2021 if it can’t raise money by selling XRP and its other products aren’t profitable.” Another said the lawsuit was a long time in coming predicting the crypto firm would eventually move to settle and then migrate outside the US. Ripple quickly defended itself stating it was ready to fight the action in court.
For regulated crypto exchanges trading in XRP may be problematic and a growing number of exchanges have announced they would delist the digital asset including the largest crypto market in the US – Coinbase. For Coinbase, a crypto exchange that is preparing an IPO, trading XRP may undermine its regulatory filings with the SEC.
As liquidity for XRP diminishes, the price of the crypto has tanked below $0.20. XRP has long been one of the largest cryptocurrencies by market cap but its valuation has declined precipitously. Today, XRP’s market cap stands at $8.9 billion. Before the SEC enforcement action was announced, XRP’s value was well over $20 billion.
While traders may love volatility, there is an old adage that you should not try and catch a falling knife. XRP is falling pretty rapidly.
