Investing.com – It has suffered huge losses again in recent days. With a market capitalization of $43.5 billion, the sixth largest cryptocurrency has fallen below the psychologically significant $1.00 mark. The US Securities and Exchange Commission (SEC) actions against Ripple continue to affect the price.
Essentially, the question is whether XRP should be defined as a security and therefore the sale of Ripple should be subject to licensing.
Some analysts believe that the price of XRP is too low just because the SEC lawsuit is dampening interest in the cryptocurrency.
In recent months, Ripple has been withdrawn from Coinbase Global Inc (NASDAQ) and other major US stock exchanges. The move was attributed to allegations by the US Securities and Exchange Commission that Ripple had floated securities on the market without permission. Ripple board members Brad Garlinghouse and Chris Larsen are at the center of the investigation. In December, the price of Ripple collapsed to around $0.20, but it rose again to $1.85 in mid-April, only to collapse again to around $0.50 until consolidation began in a wide range between $1.45 and $0.85. Recently, XRP was trading at $0.96, just below $1.00.
However, Raoul Pal believes that the XRP token presents an excellent risk/reward ratio despite the ongoing lawsuit by the US Securities and Exchange Commission (SEC).
In a new interview with Savvy Finance, the CEO of Real Vision and Global Macro Investor explained why she continues to be optimistic about cryptocurrencies, and XRP in particular.
“XRP offers an excellent risk/reward ratio. On the subject of litigation: So far, all the lawsuits we’ve seen.” [dans l’espace cryptographique] Well finished. All of these cases were resolved after the fact. Bitmex, for example, is a good example. I expect there will be a little penalty that makes you think it’s safe. But neither side wants to admit guilt. There will be a fine and then XRP will be ready for use.”
The former CEO of Goldman Sachs (NYSE:) also pointed out several factors simultaneously that will cause the price of XRP to rise in the future.
“What’s interesting about XRP is that it has a whole bunch of use cases. I know crypto-followers hate the coin – it’s not decentralized enough, but I don’t care. Do people use it? Yes, a lot more than most people realize, and the cool thing about this is The setup is that you cannot buy it on any of the major US exchanges and he is not a Bitwise fan.”
Pal said the Bitwise 10 Crypto Index Fund’s AUM assets are just under $1 billion. Once XRP becomes tradable again on the major exchanges, the fund management will have to buy a few hundred million dollars in XRP, so a “hell race” is sure to occur if the battle is over. .
The fund tracks an index of the 10 most valuable digital currencies. In addition to XRP, the fund currently invests in Bitcoin, Solana, Chainlink, Polygon, Uniswap, and .
As of today, Stellar – a cryptocurrency very similar to XRP that also specializes in improving international payments – is likely to drop its holdings and replace it with XRP; After all, the latter’s market capitalization of $6.5 billion is far less than XRP’s of $44 billion.
And even if Ripple loses its legal battle with regulators, Pal says it’s still worth betting on XRP.
“In the worst case, it drops by about 50%, in the best case it is multiplied by ten, which is why I prefer betting a 50:1 risk/reward ratio for the next three to six months.”