The XRP price bounced back on Wednesday as the market cheered the end of the legal issues between Ripple Labs and the Securities and Exchange Commission (SEC). Ripple jumped to a high of $2.58 on Thursday morning, up by about 45% from the lowest point this year. So, what next for the XRP token?
What the SEC vs Ripple lawsuit conclusion means
The biggest crypto news of the week was that the SEC decided to end its appeal it filed against Ripple Labs.
This lawsuit ended one of the longest legal battles in the crypto industry. The suit started in December 2020 when the SEC accused Ripple Labs of raising money in an unregulated manner.
It also accused the company of offering unregistered security to retail and institutional investors. The SEC also wanted Ripple to pay at least $2 billion in fine.
This case started moving in Ripple’s favor in 2024 when the judge overseeing it ruled that the XRP token sales to retail investors were not illegal and that XRP were not securities.
However, the judge ruled that the token sales to institutional investors was problematic and ordered Ripple to pay $250 million. The SEC then filed an appeal last year, with Ripple Labs filing for a cross-appeal.
The agency decided not to pursue the case further as part of its appeal to the crypto industry. Before that, the SEC ended lawsuits against companies like Coinbase, Kraken, OpenSea, and Gemini.
The ending of the SEC vs Ripple Labs case will have a major impact on Ripple and the XRP price. First, there is a likelihood that Ripple may decide to file for an Initial Public Offering (IPO) either later this year or in 2026.
More deals for Ripple
Second, the end of this case means that Ripple Labs may ink more deals with companies in the banking and money transfer industry. Some firns like MoneyGram and Tetragron Financial Group paused their partnerships with Ripple following the lawsuit.
Ripple is working on becoming a major player in the money transfer industry. Its technology is already acting as an alternative to SWIFT, a network that handles over $150 trillion a year.
Ripple has about 300 banking partners, many of whom avoided it because of its legal issues in the US. As such, there is a likelihood that more banks will be open to embracing it now.
The other implication is that the SEC may decide to approve a spot XRP ETF later this year. JPMorgan analysts have predicted that an XRP ETF will attract about $8 billion in inflows.
XRP price prediction
XRP chart by TradingView
The XRP price jumped by about 10% after the SEC ended its case. The jump was not as big as one would expect because market participants were already priced in it.
There is a risk that the XRP price will have a bearish breakdown soon since it has formed a head and shoulders pattern on the daily chart. The head section is at $3.4, while the shoulders and the neckline are at $3 and $2, respectively.
Therefore, the XRP needs to jump above the shoulders at $3 to invalidate the bearish outlook. A drop below the neckline at $1/9365 will point to more downside and risk it crashing to the psychological point at $1. On the flipside, a move above the neckline at $3 and the head section at $3.4 will point to more gains, potentially to $5.
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