In a long overdue decision, Judge Torres ruled in favor of XRP in their case against the US Securities and Exchange Commission (SEC) yesterday. The ruling is a positive development for the cryptocurrency industry, especially with focus on whether digital assets should be considered securities in the United States.
The ruling is expected to set a precedent for the industry moving forward. It is a positive for both altcoins and the broader industry, as the default expectation is that these assets are not considered securities as long as they are publicly available.
This event is likely to have broader ramifications for the ongoing legal issues and may help rebuild confidence in the industry for developers and attract more liquidity to the ecosystem.
XRP is defying expectations with its massive price hike and high trading volume
After the news, XRP saw a price surge, reaching $0.93, the highest price since May 2021, and closing at $0.82.
according Adding to data compiled by research firm CCData, the news sent trading activity flooding in as XRP trading pairs on centralized exchanges (CEX) recorded total volume of $6.05 billion per day, up 1351% from the previous day.
The asset’s re-listing on other centralized exchanges, including Coinbase, Kraken and Gemini, also contributed to the sudden spike in volumes.
The news surrounding the ruling also led to nearly 100% daily gains for XRP, with other tokens such as Solana (SOL) and Cardano (ADA), which were recently considered securities, seeing significant gains of 35% and 28%, respectively.
Despite the negative backdrop XRP faced due to the lawsuit, the market’s deep liquidity at the 1% level has remained resilient to date (yet). The 1% supply/ask depth for XRP at the annual opening was 26.5M XRP, which saw a 0.41% variance over the year and remained strong at 25.1M XRP on July 12.
Derivatives data show positive sentiment
According to the report, derivatives data indicates that the positive funding rate for XRP has held steady over the past few days, in line with the broader positive market sentiment.
News of the lawsuit generated a spike in speculative interest on the bid side, with a $280 million increase in open interest, from $635 million to $913 million across the exchanges. Moreover, funding rates reached more than 0.03% across the exchanges, three times higher than the baseline level of less than 0.01% prior to the announcement.
On the other hand, the history of XRP funding rate shows that speculators who trade perpetual contracts favor the upside, with minimal time spent this year in the negative funding rate zone.
This confirms the positive sentiment of traders towards XRP, which has recently been rewarded with a huge price hike due to the announcement. While it remains to be seen if XRP will maintain its very positive funding rate, it is currently a good benchmark for gauging positive sentiment within digital currencies, given the interest and volume it generates.
Given the success of the lawsuit, the market implications are very positive, and the ruling provides a clarity that was not present before the ruling.
According to CCData, the market may see some trends emerge, such as coins considered to be securities that are recovering nicely and potentially outperforming and the possibility of a decline in Bitcoin’s dominance as an overall percentage of market capitalization, given renewed optimism in altcoins.
Despite the recent surge in positive sentiment and renewed investor confidence, XRP has seen a significant price drop. After getting close to reaching the $1 mark, which has not been seen since November 2021, XRP is currently trading at $0.7002, which is down more than 11% in the past 24 hours.
Featured image from Unsplash, chart from TradingView.com