Known for pioneering cryptocurrency XRP, Ripple has been caught in a high-stakes legal tussle with the U.S. Securities and Exchange Commission since last year.
Ripple CEO Brad Garlinghouse doubled down on his frustration surrounding the lack of clarity in U.S. regulation of digital assets in an appearance on CNBC’s “Squawk Box” on Wednesday.
He says a big part of the problem with crypto regulation in the U.S. is not the cryptocurrency players, but the lack of action from the U.S. regulators compared to global peers. The SEC charged Ripple, co-founder Chris Larsen and Garlinghouse with conducting an illegal securities offering that allegedly raised more than $1.3 billion through sales of XRP.
XRP was trading up about 8 percent on Wednesday morning amid a crypto rebound, and it is up more than 300 percent year-to-date but has fallen far from its YTD high during the recent crash in cryptocurrencies. Bitcoin had bounced back from its massive, recent decline and was hovering around $40,000 on Wednesday.
“There’s a misunderstanding of how these technologies can be applied,” Garlinghouse said. “In the United States, there has been a lack of regulatory clarity. Other countries, G20 markets, they have invested the time and energy, either through legislation or rulemaking, to provide that clarity and certainty, which allows investors to participate, entrepreneurs to build.”
Fights between the crypto industry and regulators are ongoing — on Wednesday, the U.K. banned an advertisement advising people to buy bitcoin calling it “irresponsible.” An opinion article in the Wall Street Journal this week called for a ban on crypto and cited issues like hackers using cryptocurrencies to get paid for cyberattacks like the recent Colonial Pipeline ransomware incident.
Robinhood, says in the first quarter of 2021, 9.5 million customers traded crypto on Robinhood Crypto, compared to 1.7 million in the fourth quarter of 2020.
Ripple’s on-demand liquidity service uses XRP as a kind of “bridge” between currencies, which it says allows payment providers and banks to process cross-border transactions much faster than they would over legacy payment rails.
Despite this month’s return of crypto volatility — bitcoin is still down more than 32 percent this month for its worth monthly decline since 2018 — it and other tokens like XRP surged to new heights this year. Ripple owns most of the XRP tokens in circulation and sells a tiny fraction of its holdings each month.
“XRP is an open-source technology very analogous to bitcoin,” Garlinghouse explained. “But the SEC is making the assertion that these are investment contracts … that Ripple sales of XRP to our customers is actually an investment contract. That isn’t true. If you buy XRP, you don’t have ownership of Ripple and ironically you have XRP owners who have tried to sue the SEC for even bringing the case.”
Bitcoin, Energy Use and Elon Musk
Iran banned bitcoin mining operations on Wednesday amid power shortages. China has cracked down on miners in recent months too after concerns about energy consumption.
The Ripple CEO has been a critic of how much energy bitcoin mining uses but says he is far from the only figure who has raised the issue, with everyone from Elon Musk to Bill Gates and Jack Dorsey weighing in, and Ripple is not waging some secret war against bitcoin.
“If Ripple could control those people we probably wouldn’t have a lawsuit from the SEC,” he said.
Musk’s Monday tweet that he was talking to bitcoin miners about energy efficiency ideas that were “promising” helped boost bitcoin.
Earlier this month Ripple beefed up its board, appointing former U.S. treasurer Rosie Rios.
“I think at the end of the day, the industry should focus on utility. And are these technologies solving real problems for real customers,” Garlinghouse previously told CNBC, adding that Ripple will continue to leverage its XRP ledger and tokens to make payments efficient. Still, the company has threatened to relocate to other jurisdictions if XRP is deemed a security in the U.S.
Bitcoin´s New All-time High Underscores its Mainstream Value
Bitcoin is undeniably a mainstream asset class and most investors should consider including crypto assets as part of a diversified portfolio, asserts the boss of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The bullish observation from Nigel Green, CEO and founder of deVere Group, which has $12bn under advisement, comes as the world’s dominant cryptocurrency hits a new all-time high of more than $66,000 on Wednesday.
Mr Green notes: “In July, we publicly predicted that Bitcoin would reach and most likely beat it’s previous all-time highs.
“I am confident that whilst there might be some profit-taking in the near-term, so that investors can accumulate more later, the momentum is such that we can expect prices to continue on their upward trajectory.”
He continues: “This fresh all-time high deniably cements Bitcoin as a mainstream asset class. I believe that most investors should consider including crypto assets as part of a diversified portfolio.
“Why? Because crypto is the inevitable future of money and there is clearly going to be advantages for those investors who have exposure early on – in the same way as those who invested in the major internet, online and tech successes back in the day, such as Amazon, Google and Apple, have secured enormous returns.”
Wednesday´s price highs come as the ProShares Bitcoin Strategy ETF – the first of its kind – launched on the New York Stock Exchange on Tuesday at the opening bell.
The deVere CEO says there are there are five main factors that will secure the longer-term upward price trajectory.
“First is the U.S. Federal Reserve saying it has no intention of banning cryptocurrencies. It’s highly probable that other cryptocurrencies will have more stringent regulatory oversight, yet Bitcoin could be viewed differently by authorities partly due to its gold-like status,” he observes.
“Second is the ongoing, mounting interest from institutional investors including Wall Street giants and major payments companies, who bring their capital, expertise and reputational influence to the market.
“Third, is the rising number of crypto advocates and mega influencers like Elon Musk, Jack Dorsey and Cathie Wood who have a clear message: crypto is the inevitable future of money.”
Fourth, the technicals back the prediction. Looking at Bitcoin halving events, over time we’ve seen that values rise substantially in the year after a halving. After the 2012 and 2016 Bitcoin halvings, prices increased by 55 times and 15 times respectively.
“And fifth, cryptocurrencies – Bitcoin in particular – have changed the way the world handles money, does business, makes transactions and manages assets. Investors appreciate the intrinsic value of digital, borderless, global currencies for trade and commerce purposes in increasingly digitalised economies in which businesses operate in more than one jurisdiction.”
He goes on to say: “This will only increase as mass global adoption increases. Only last month El Salvador became the first country in the world to adopt Bitcoin as legal tender, and I’m certain many others will follow suit.”
Mr Green concludes: “Today is a major milestone. It underscores crypto´s mainstream appeal and galvanises its place in the global financial system.”
3 Largest Cryptocurrencies Account for Almost 70% of All Crypto Market’s Value
The cryptocurrency sector has in the recent past witnessed a surge in the number of new coins joining the market amid rising value. However, despite hundreds of different coins existing, only a few established digital currencies are dominating the market.
According to data compiled by Finbold, the top three largest cryptocurrencies (just 0.02% of all 12,917 coins) by market capitalization account for 68.73% of the total cryptocurrency market of $2.53 trillion as of October 20, 2021.
Bitcoin has the largest share at 47.6% or $1.2 trillion, followed by Ethereum at 17.93% or $454.76 billion. Binance Coin (BNB) takes the third spot at 3.2%.
Cardano (ADA) and Tether (USDT) round out the top five cryptocurrencies with a market share of 2.76% and 2.72%, respectively.
Crypto market heading in the right direction
The domination by the three cryptocurrencies highlights the recent rise of the market that has witnessed an increase in both retail and institutional investors. The market has also recorded an introduction of new investment products: According to the research report:
“To summarize, many trade experts believe that the cryptocurrency market is now trending in a positive direction. The introduction of spot ETFs in line with suitable regulatory frameworks may aid the industry in gaining considerable momentum in the future.”
As the maiden cryptocurrency, Bitcoin holds the top spot in the market cap, with the assets receiving approvals from different players. The asset’s rise has led to proponents considering it as a hedge against inflation.
In the future, the asset is likely to expand its dominance in the market, especially with the emergence of new related investment products like the Bitcoin ETF.
Bitcoin Price Just 1% Off All-time High: Will this Trigger a Sell-off?
Long-term Bitcoin holders will begin to realise some profits amid near all-time price highs, but we expect values to continue to rise due to more active market participants, predicts the CEO of one of the world’s largest independent financial advisory, asset management and fintech organisations.
The prediction from Nigel Green, chief executive and founder of deVere Group, comes as the world’s dominant cryptocurrency was less than 1% off its all-time high of $64,888.
The price highs come as the ProShares Bitcoin Strategy ETF – the first of its kind – launched on the New York Stock Exchange on Tuesday at the opening bell.
Mr Green says: “The Bitcoin price has gained around 35% since mid-September as interest around the first SEC-approved Bitcoin ETF has grown.
“It’s been seen as a major test to see if mainstream investors are ready to include cryptocurrencies in their portfolios alongside other assets such as stocks and bonds – and it appears, judging by the reaction, that they are.”
He continues: “This will continue to drive not only Bitcoin but the wider digital assets sector, therby encouraging more ETFs, amongst other crypto vehicles, to be brought to market.
“This will inevitably bring in a growing number and broader range of active market participants, including those using pension funds, and retirement and brokerage accounts.
“The growing interest in and demand for crypto will help maintain the upward trajectory of Bitcoin and other digital currencies in the near term.”
In September, he forecast that the Bitcoin price would be back to its previous highs by the end of this year. This is already now almost proven to be an accurate prediction but, he says, the momentum will drive them further still.
Yet despite the growing number of active market participants which, as Nigel Green says, “as history teaches us, have matched with increasing interest in the digital asset in early stages of bull markets,” some long-term Bitcoin holders might “begin to realise profits.”
He notes: “Long-term holders typically buy in a bear market and sell in a bull run. They are spurred into realising some profits when the price is close to or breaks the previous all-time high.
“As such, we can expect to see some long-term holders now cashing in some Bitcoin with a view to accumulating more later.”
However, the deVere CEO concludes that any long-term holders’ selling is “likely to be balanced by growing activity by new investors” and that therefore “the price momentum should be sustained.”
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