What Does Ripple’s Possible IPO Mean & What Could Happen To XRP
The company plans to go public if it wins a lawsuit over the US Securities and Exchange Commission (SEC). Why should this be treated with a grain of salt, and should XRP be viewed as a stable asset? Let’s try to figure it out.
LATOKEN does not provide investment advice; the material is written for informational purposes only. Cryptocurrency is a volatile asset that can lead to financial losses.
The CEO of the Japanese financial giant SBI Group, Yoshitaka Kitao, has confirmed Ripple’s intention to hold an IPO and go public if it wins a lawsuit against the US Securities and Exchange Commission (SEC). SBI Group is one of Ripple’s longtime partners.
For the first time, Ripple CEO Brad Garlinghouse announced plans to hold an IPO in January 2020 at an economic forum in Davos. In December of the same year, the regulator accused the company of illegally selling unregistered securities under the guise of tokens of $1,3 billion.
In April of this year, there were several positive factors, against the background of which the value of the XRP token was approaching the $2 mark. On April 7, the court opened the blockchain project access to documents for internal use by the SEC. The company expects to find evidence that the regulator has in the past referred to the XRP token as a currency, not security.
On April 12, Garlinghouse and blockchain co-founder Chris Larsen filed a motion to dismiss the SEC’s individual liability claim. According to the company’s representatives, the regulator was unable to prove the fact of deliberate violation of the law by its management. XRP traded at about $1,40 on April 29, according to CoinGecko. In April, the token has risen in price by 150%.
Token price may still exceed $2
Since the SEC was still unable to prove that Ripple’s management deliberately pursued policies that violated applicable law, everything could end quite peacefully, and the company will restore its reputation. There is no need to talk about victory yet, but the Commission may adopt a document stating that there are no more claims against the company.
This will be an admission that the regulator did not see sufficient grounds for further proceedings, and the whole story could end there. Outwardly, Ripple’s position looks strong, and the Commission does not have so much to prove the company’s guilt as it explains its claims and actions. That’s why it’s possible to say that it takes a position on the defensive.
XRP looks very interesting in the medium term. Now there is no reason for a significant increase in the asset, but in the future, depending on the news, the token may grow over $2. At the same time, there are risks since the token tends to increase or fall immediately by 20–40% per session. Therefore, it is not yet worth considering it as a reliable investment.
There is a possibility that we can see XRP at $6–7
The main factor for restoring Ripple’s reputation could be either a victory over the SEC or an amicable agreement with the SEC. Justice in the USA in such matters is somewhat unpredictable, so both positive and negative outcomes for XRP are equally likely. Ripple’s plans to go public company should be treated with skepticism since the plan itself assumes implementation only if a difficult-to-predict condition is met — a win over the SEC.
It is definitely worth paying attention to Ripple, but the share of XRP in the investment portfolio should be inversely related to its risks. With an increase in risks, the share should decrease, and vice versa, which is quite logical. A win or an amicable settlement with the SEC might significantly heat up XRP quotes. With a moderate forecast, growth may be limited to $3,7, with a positive one — we can even see $6–7.
Should you sell all XRP tokens right away?
Initially, Ripple wanted to make an interbank blockchain, but then the initial fears that banks would not use a third-party platform were justified. Most of the tokens were “in the hands of the founder,” and the relatively high liquidity of the token made it possible to continue funding PR and attract private investors. However, Ripple’s image has already been compromised.
Since Ripple has attracted a lot of private investors through active marketing and PR, and the project’s prospects are highly dubious, the SEC began to check it. Formally, the SEC considers that this is an issue of unregistered securities. Against this background, the news about a potential IPO looks like the “final push.” Many experts believe and even openly state that Ripple has all the signs of a doubtful project and some even say it is worth selling all the XRP tokens right now.