The Ripple-based token rallied strongly during the mid-week trading session, posting an intra-day gain of about 8% for the day as it looked set to breach the $2.55 mark.
The altcoin is now the third-largest crypto asset by market valuation, trading at $144.5 billion, displacing Tether (USDT) with a valuation of $142 billion into fourth place.
The atmosphere in the Ripple ecosystem significantly elevated after the inclusion of Ripple’s XRP in President Trump’s statement on the Crypto Strategic Reserve.
President Donald Trump stated that XRP, Cardano (ADA), and Solana (SOL) will now be part of the US crypto reserve.
This comes after he signed an executive order creating a working group on digital assets tasked with establishing clear regulations for the cryptocurrency industry and determining whether a national digital asset stockpile is feasible.
The main goal of the proposed reserve is to strengthen the US digital asset market. The plan highlights three well-known cryptocurrency assets as essential parts of the recommended reserve structure. By suggesting a more crypto-friendly SEC chair and establishing a strategic reserve with US-based coins, President Trump reportedly intended to make cryptocurrency development easier.
Technical Analysis
The market action demonstrated that XRP has failed to hold the $2.55 support line, confirming a tug-of-war between bulls and bears.
Market indicators show that if the $2.55 support line is not recovered, the current recovery will likely be vulnerable. If the price breaks above $2.65, price discovery will occur. The RSI’s declining peaks affirmed market sentiment that such a rally was likely a liquidity trap for small portfolios.
Market Fundamentals
The main concern for Ripple is the SEC litigation and actual adoption, which is even more significant than Trump’s increased visibility of XRP. Whales understand this and would rather profit quickly than risk a false “strategic reserve” status.
Cryptocurrencies like XRP are now more accepted thanks to the SEC’s recent reform. In the past, the commission vigorously examined a variety of digital assets under Gary Gensler’s direction, even bringing legal challenges against Ripple Labs.
XRP has prospered under the Trump-led administration due to the change in regulatory attention.
XRP had no chance of success under the Joe Biden-led administration, underscoring the importance of regulatory certainty in asset performance.
Ripple Has No Obligation to XRP Holders
David Schwartz, the CTO of Ripple, recently affirmed that Ripple is under no obligation to hold XRP, attributing this notion to XRP’s security misrepresentation.
- He made his remarks in response to a continuing debate concerning Ripple’s obligations to token holders. Pierre Rochard, an XRP critic and supporter of Bitcoin, contended that Ripple has no function to benefit XRP holders. He claimed that even if selling its substantial XRP holdings hurts retail investors, the company is still free to do so. In his opinion, this is what renders XRP insecure.
- Remarkably, Schwartz concurred, stressing that Ripple acts in its best interests, like any other company.
- He likened owning XRP to owning early pieces of art by a budding artist. Investors are under no duty to support the artist’s continued creation of value that enhances their holdings, even though they may wish to.
- He emphasized that no business, including Ripple, should be expected to act against its interests to please investors. The CTO of Ripple noted that the company has been a well-known participant in the market for almost 14 years. The business has more XRP than it could realistically sell off quickly.
A well-known Ripple critic, who goes by the handle “ScamDaddy,” posted a screenshot of the exchange after Schwartz’s most recent comments. He implied that this has always been obvious and asked why anyone would be shocked by Ripple giving its business objectives top priority. In response, Schwartz said that people promoting the idea that XRP is a security are primarily to blame for the misunderstanding regarding Ripple’s role in the ecosystem.
He suggested that such a group had purposefully misrepresented how XRP and Ripple are related. “The ‘XRP is a security’ crowd is primarily to blame for purposefully causing misunderstanding regarding the connection between Ripple and XRP,” he added.