Ripple’s lawsuit triggered an XRP led altcoin crash as we can see all over the crypto news today, with the market being in the red. The SEC is suing Ripple and two of its top executives for selling the tokens which the regulator claims were unregistered securities so let’s read more about in today’s Ripple news.
XRP dropped by over 30% on the news but the carnage could be just around the corner. The negative sentiment spilled into other altcoins as the investors try to predict which asset is next. The situation is now under control as Ripple holders have nothing to fear but also the news was enough to turn the overall market trend into a bearish one. Back in the early days of the crypto market when BTC was only at its beginnings, Ripple Labs was in the process of creating a blockchain-based protocol of their own.
XRP tokens were minted eventually and over the years they were sold and distributed to investors, institutions, and individuals. However, the lion’s share of the token supply remained locked in escrow for which Ripple is responsible. The company’s founders set aside a lot of coins for themselves and when XRP rocketed to over $3 per token back in 2018, the CEO Brad Garlinghouse and Executive chairman Chris Larsen became among the richest men in the world. However, after all of these years, the US Securities and Exchange Commission filed a lawsuit against Ripple and even sued the two executives.
Ripple’s lawsuit triggered a market crash with the native XRP protocol tanking as a result. The selloff could only get worse as the domino effect of exchanges delisting the altcoin started. It also created the ripple effect across the industry where the investors are reconsidering their altcoin holdings and are changing it into BTC or cash. Altcoins across the board are in the red and the wallet data also suggests that XRP whales are trying to absorb the selling. The damage is done to XRP also because there are government agencies that can easily go after centralized cryptocurrencies.
What the US government did was actually putting a damper on the unstoppable BTC trend and there are two scenarios that could likely play out related to the regulatory shift. More altcoin capital could come out of coins such as BTC and XRP and could cause the dominance to fly further and the bull trend to keep flourishing. However, two negative sentiment altcoins could cause another tipping point similar to the one of 2019 and take BTC into the bears with it.
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