XRP Falls 10% as Ripple Insists It Stands on ‘Settled Ground’

The Steepest Drop on the Board

XRP seems to have bore the brunt of the recent market bloodbath the worst, with the token falling to $1.29, a slide of roughly 7.5% to 10% depending on the measurement window, against bitcoin’s 2.2% decline, ether’s 3.6% and solana’s 4%.

The percentage differences are important because XRP had been the market’s designated winner going into the vote, climbing by as much as 9.8% in the run-up to the vote, eventually peaking at $1.49 on Sept. 14. Moreover, options activity also jumped 350%, briefly overtaking both bitcoin and ether.

Amidst all of these developments, Ripple’s argument was a little confounding, not engaging with the price dip at all. Instead, the firm’s chief legal officer Stuart Alderoty opined:

Ripple and XRP stand on settled ground.

His case rested on two points:

• The first is the 2023 federal court ruling that programmatic XRP sales on exchanges were not securities transactions.
• The second is more recent and more consequential. On March 17, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) issued a joint interpretive release naming 18 crypto assets as digital commodities rather than securities, XRP among them alongside BTC, ETH and SOL. Unlike staff speeches, that interpretation is a formal agency action binding on both regulators.

Lastly, Ripple’s corporate account called the failed vote “a tremendous missed opportunity” while making the same point as its CLO, i.e. the need for clear rules has not gone away, and neither has the company’s role in writing them.

Decoding XRP Fall and the Road Ahead

When one asset absorbs the most leveraged upside bets ahead of a binary event, it accrues the most forced selling when the event goes the wrong way. Bitcoin’s price fell under $75,000 for the first time since Aug. 20 in the same window, but from a base of far less concentrated speculation.

Also, it bears mentioning that SEC Chairman Paul Atkins and CFTC Chairman Michael Selig launched Project Crypto as a joint effort in January to harmonize oversight, and the March interpretation was its first major output. Former CFTC chairman Christopher Giancarlo said after the vote that the two chairs are determined to put frameworks in place under U.S. law rather than watch activity move offshore.

For XRP, that is a slower path with a lower ceiling. Rulemaking can be challenged, delayed and reversed in a way an act of Congress cannot.

And, even though Ripple’s ground may well be settled, the market’s is not, and $1.29 is where the reading currently sits (whether backers like it or not).