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Why Is Ripple (XRP) Plunging When Trump Picked Pro-Crypto SEC Chair?
TL:DR;
Led by bitcoin, most of the cryptocurrency market is well in the green today, but this is not the case for Ripple’s native token.
This comes in a particularly confusing time as Donald Trump made his choice for a new SEC chair and he is someone with good history with the crypto industry.
Pro-SEC Chair at Last?
It was roughly four years ago when the US Securities and Exchange Commission initiated its lawsuit against Ripple, alleging the company and two of its top execs of illegally raising $1.3 billion by selling XRP tokens as unregistered securities. Since then, the case has undergone many tribulations and developments, but most have gone well for Ripple, which has secured a few partial wins.
The lawsuit was close to its resolution this summer when a US judge ruled that the firm needed to pay $125 million and it would be settled. However, the SEC, still under Chair Gary Gensler, appealed a 2023 verdict, thus extending the case.
Donald Trump’s victory in the presidential elections on November 5, though, changed the complexion of the game as he had promised to fire Gensler on his first day in office. The current SEC Chair didn’t wait to be fired and announced his resignation a few weeks back, which will become official on January 20.
All crypto eyes turned back on Trump, expecting a friendlier replacement at the helm of the securities regulator. His nomination is indeed pro-crypto, at least historically – former SEC Commissioner Paul Atkins. Consequently, XRP should be surging, right?
Why Is XRP Dumping?
Most of the aforementioned developments, including Trump’s win and Gensler’s resignation, led to massive rallies for Ripple’s native token. The asset shot up from $0.6 a month ago to almost $3 earlier this week, thus skyrocketing by more than 400% within this timeframe.
Now, though, XRP has plummeted by 12% on a daily scale, going below $2.3. Moreover, it lost its spot as the third-largest cryptocurrency to Tether as its market cap dropped to $130 billion.
The timing is quite confusing, given the positive news coming from the future Trump administration. So far, it seems like the rally was a classic ‘buy-the-rumor, sell-the-news’ event since XRP skyrocketed in anticipation of a big change in the SEC and is dumping once that change comes to fruition.
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