Ripple Drops In Price and Receives More Regulatory Clarity

With the recent decline in the price of Bitcoin and Ethereum, it is natural that Ripple would follow suit. After breaking through the $0.28 support level, it is now hovering around $0.26. This is occuring at the same time as the price of Bitcoin hovers around the psychological level of $10k. This downward pressure is likely due to eased tensions regarding Chinese trade negotiations. As the Chinese yuan recovers and risk dissipates, crypto goes into a bit of a slump. 

The top three tokens have been moving in tandem recently now that Ripple has received similar regulatory guidance as Bitcoin and Ethereum. In the UK, all three tokens are now being classified as exchange or utility tokens rather than the much more onerous “security token” classification. 

Regulation and Controversy

The U.S. still has very uncertain regulation regarding Ripple, but these new comments by the UK are indicative of some more friendly legislation that may occur there. In actuality, their comments are almost more friendly to Ripple because they view it as a crypto asset that can be used by banks and regulators, rather than an asset whose existence is in direct competition with it. This is almost comical considering how the core crypto community criticizes Ripple for not being completely decentralized. 

Meanwhile, back in the U.S. there is a legal battle underway on whether Ripple may be defined as a security or not. And Peter Brandt has accused the company of manipulating the price of XRP in order to prop up the price. In his words: 

“The chart pattern for many, many months has shown the distribution of XRP by Ripple – it has manipulated the price to hold support. But if support gives way Ripple will be forced to dump in a major way.”

It is his contention that as the largest holders on XRP, Ripple and its executives have engaged in manipulation that will end with a 20% drop in price once they are stopped. 

The Ripple Ecosystem

Ripple is in the midst of pumping XRP into an ecosystem of startups whose use cases are enmeshed with that of Ripple and would naturally create demand for it. Ripple operates an investment arm called Xpring that just closed a $4 million seed round with a in-browser payment processing app called Coil. This is in addition to a grant of approximately $265 million to help build up the community. By having more creators, consumers, and strategic partners, they can speed up their growth plan for the company. 

Coil’s business plan revolves around users paying a set amount (currently $5) each month, and then when they consume content on a website that is compatible, the content creators get paid. With some creators already earning thousands of dollars a month, and more growth opportunities underway, Ripple’s aggressive expansion strategy seems to be all about making an entire ecosystem around the Ripple protocol. By financing it with XRP, they can create a new level of demand for Ripple and create a much bigger pie or market capitalization.