XRP like the phoenix rises from the ashes
Abraham George Market Musings
When the whole world is collapsing around you in terms of any tradable asset including all other cryptos one crypto has rallied around 45% in one week. It doesn’t come as a surprise to me nor should it surprise any long-term crypto investor. None of us could predict when the rally could start, though there were many pointers the key thing to do was to be invested. The crypto that I am referring to you is XRP.
The drama surrounding this instrument in the last two years is so huge that whenever everything is settled, I believe that Hollywood will come out with a movie that will be as interesting as the ‘Big Short’.
Those who have followed the ongoing case between Ripple and SEC understand the lies, schemes, accusations, and framing that a regulatory body like SEC has made against Ripple totally under the misguided belief that the company will fold under the pressure of the SEC and will not go the distance to fight the case.
The SEC’s primary responsibility is to protect the investors, especially the retail investors. This case has clearly exposed that the last thing on SEC’s mind is to care for the investors. They have been winning almost 98 % of cases filed against entities with their rule of enforcement. They do not give clarity to any rules that you could have violated but will be quick to sue you.
At every stage of this case, Ripple has won the ruling against the SEC, the only thing the SEC has achieved so far is to postpone the hearing to delay the process. Both the presiding judges of this case Hon. Sarah Netburn and judge Analisa Torres have been extremely patient with the SEC’s antics and lack of respect for the judicial system.
As one of the content creators on YouTube said that “I am seven years short of a law degree but one thing I know for sure is if you try to make a circus out of the judiciary, they will make a clown out of you”. In the last hearing, Judge Torres made this statement “the SEC is hypocritical and they are not following a faithful allegiance to the law”. These were the exact words of the Judge.
All along Ripple was convinced that they have done nothing wrong. It was a good fight to go the distance and they knew the truth will set them free. Ripple has deep pockets and the case so far has cost them more than $100 mil. Before the case was made against Ripple, XRP was the number two token after Bitcoin. On account of the case, they lost $15 bln dollars in market value and they rank number six in market cap among all traded cryptos now.
Gary Gensler the Chairman of the SEC is a career politician. He has had an illustrious career having worked at Goldman Sachs for 18 years, was Chairman of the CFTC, taught a course on cryptocurrencies at MIT, and now at the SEC. Ever since he took charge of the SEC, he has never given a straight answer to anything he was asked by a news channel or at a congressional hearing.
Many of the viewers are fed up with his Shenanigans and crazy talk. He wants to grab more power and wants to label all cryptos except Bitcoin as securities. He does not set the law it is the Congress that does it. There is every chance that once regulatory clarity for cryptos is established the regulatory power will go to the CFTC. There is a chance Gensler may resign and if the Republicans take control in the mid-term elections, he could be removed. I know of at least six senators who are visibly upset with his public statements or his lack of appearance to the various committees. He is probably one of the most disliked public officials in the world.
John Deaton an attorney has filed a class action lawsuit against the SEC representing the XRP retail investors. When I started writing about Ripple about two years back he had about 13,000 XRP holders that he was representing and now that has grown to 74,000. He is a darling of the XRP community and the SEC hates his guts for exposing them.
I have followed this token so closely and I am still following it that I can keep on writing on it. But let’s get to the crux of the issue. As per my reading, the SEC has completely lost the case at every level. They have shot themselves in the foot by framing an unwanted case against Ripple.
There are two outcomes that can happen. One is a settlement and the other is a summary judgment. While the CEO of Ripple Brad Garlinghouse and even John Deaton think that the case can settle any time between 2 months and 9 months my hunch is it can happen by the 30th of Sep. I think private discussions are already taking place between Ripple and SEC. It really makes sense for settlement to take place now as it is the financial year end for SEC. Ripple will be happy to pay some fines for getting clarity and it will be the only crypto company that will have regulatory clarity in the US as of now.
If the case drags to summary judgment and if the SEC loses, they will lose all powers to regulate any other cryptos in the future.
I think the recent pump in XRP has happened with some informed participants being involved. On the log scale, XRP is forming a symmetrical triangle and it is at a break-out point. If it backs off from here, one should have another opportunity to buy into XRP. If not consider that “the train has left the station”.
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Abraham George is a seasoned investment manager with more than 40 years of experience in trading & investment and multi-billion dollar portfolio management spanning diverse environments like banks (HSBC, ADCB), sovereign wealth fund (ADIA), a royal family office, and a hedge fund.