Analyzing XRP's Price Decline Following SEC Lawsuit Victory: Insights from Kaiko Analytics Firm

Data from cryptocurrency exchanges, as analyzed by asset research firm Kaiko, reveals that significant buying demand for XRP was primarily instigated by large traders in the United States following Ripple's partial legal win against the U.S. Securities and Exchange Commission (SEC) in July.

In their latest analysis, Kaiko highlights that XRP experienced significant selling pressure in August, particularly on exchanges like Upbit in Korea and OKX based in Seychelles. Conversely, Coinbase, the leading U.S. cryptocurrency exchange, recorded notable buying activity for XRP during the same period.

"The crypto research firm also observes a notable increase in XRP's average trade size on Coinbase, surpassing that of all top ten altcoins except Ethereum (ETH).

This shift suggests potential involvement of large traders in the U.S., who may have regained access to XRP following the July court ruling. Despite this, the majority of XRP trading activity still occurs on offshore exchanges. In the U.S., XRP ranks sixth among the most traded altcoins by cumulative trade volume, while it takes the top position in offshore markets.

The U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple in late 2020, alleging that the San Francisco-based payments company unlawfully sold XRP as an unregistered security. In July, District Judge Analisa Torres delivered a ruling stating that Ripple's automated, open-market sales of XRP, known as programmatic sales, did not constitute security offerings, contradicting the SEC's claims. However, the judge upheld the SEC's argument that Ripple's direct sale of XRP to institutional buyers qualified as a securities offering.

Following the ruling, XRP's price surged from approximately $0.47 to a peak of around $0.82 in July. However, the cryptocurrency, ranked fifth by market capitalization, subsequently retraced most of these gains and is currently trading at approximately $0.504 at the time of writing."

Sep 07, 2023