- The SEC vs. Ripple lawsuit was finally ruled on July 13, 2023, making both parties taste the sweetness of partial victory.
- The result has paved the way for altcoins and the weeks that followed showed a decrease in BTC volume dominance.
Bitcoin, the ancestor of all cryptocurrencies, has enjoyed unyielding dominance since its launch and over time, has dramatically increased its market cap and volume. The reason can be getting a decade’s headstart on several other networks and the inherent features of security and rarity of Bitcoin.
Altcoins, which come from blending the sound and meaning of the words alternative and coin, were launched later than Bitcoin with the purpose of overcoming the challenges of BTC and making another crypto coin sit on the throne of the crypto world.
Among several altcoins racing to the top, XRP too was running, a bit slower but gradually gaining pace. Soon, XRP met, what can be called, its biggest hurdle in the marathon, and overcoming it has made XRP the leader of the altcoin race. The statistics even claim the displacement of Bitcoin by altcoins in the near future.
The Hurdle
The Securities and Exchange Commission (SEC) targeted Ripple, the creator of the XRP token, with an allegation that the company raised nearly $1.4 Billion from investors in 2013, but did not register it under securities. According to the SEC, any stock market company needs to file a registration document to legally raise money from the public. Failing to do so, Ripple Labs and two other executives were charged with selling unregulated securities.
Although there had been several previous examples of the SEC striking the crypto space, this case in particular was high-profile and a major punch to the Initial Coin Offerings (ICOs), which are common for cryptocurrencies. The case resulted in the price of XRP being depressed throughout the case and several exchanges suspending the trading of XRP.
On July 13, 2023, the result of the case was announced and it made both look mildly victorious. The court ruled that, when sold to the public, XRP will not fall under securities, however, when sold to institutional investors, it will fall under unregulated securities.
Although each stage of the case was highly observed by the crypto community and the Southern District of New York Court ruling in favour of XRP was a major win, still, SEC has managed to tumble the first piece of the domino. The result may be cryptocurrency coming under the umbrella of the SEC in the future and faces even harder regulations.
The Result
Following the lawsuit, investors have spiked interest in altcoins and BTC has seen a low in volume dominance, a report by Kaiko says. There was a slip of 8% in BTC volume dominance after the lawsuit result. Also, if measured across the top 25 centralised exchanges, the dominance volume has reduced to 27% in July compared to 45% in January.
The 1% market depth, which helps in measuring the liquidity, has seen a significant surge for altcoins in the weeks following the ruling. Also, the same factor, measured for the top 10 altcoins, increased to nearly $20 Million.
Conclusion
Another report claims that BTC experienced an outflow of investments amounting to nearly $13 Million while other prominent altcoins like Ethereum, Solana, Uniswap, and XRP saw an inflow of investments. There was also a sharp drop in the trading of BTC by several offshore exchanges, primarily owing to the high volume of altcoin trading in South Korea.
As more projects and cryptocurrencies enter the altcoin market, it is sure to attract the attention of investors and the overall market looks bright for altcoins.
