Crypto: The SEC Warns That XRP Is Driven By Speculation!

The crypto market is a volatile arena where speculation plays a crucial role in determining prices. Recently, the SEC (Securities and Exchange Commission) made a statement that could change how XRP, the crypto linked to Ripple, is perceived. Indeed, a key document in the lawsuit between the SEC and Ripple highlights that speculation would be a fundamental driver of XRP’s utility and price.

Speculation, the driving force behind XRP’s utility

A document shared by Anderson, a prominent figure in the XRP community, reveals an implicit acknowledgment by the SEC of the central role that speculation plays in the valuation and utility of XRP.

According to this document, taken from the ongoing lawsuit between the SEC and Ripple, speculation does not merely influence the price of XRP temporarily but appears to be an essential catalyst.

The SEC relies on an email sent by Brad Garlinghouse, CEO of Ripple, in April 2017. In this message, Garlinghouse asserts that the recent increase in speculative activity around XRP, as well as the rise in price, have been decisive factors for the company.

These speculative movements would create the necessary liquidity for XRP’s integration into Ripple products such as On-Demand Liquidity (ODL).

In other words, according to Garlinghouse and the SEC, speculation would be the lever that allows XRP to generate enough volume to achieve its utility in cross-border payment solutions.

This concept, sometimes referred to as the “flywheel,” implies that speculation is not just a mere side effect but a crucial component of XRP’s functionality.

An uncertain future for XRP

However, this acknowledgment of the speculative role could also be interpreted as a structural weakness of XRP. If the cryptocurrency’s utility depends on a speculative dynamic, it raises questions about the stability of its long-term economic model.

What would happen if speculation around XRP drastically decreased? Anderson himself questions why the SEC raised this issue in the context of the lawsuit, suggesting that it could weaken Ripple’s position.

Some analysts believe that this dependence on speculation could render XRP vulnerable to the cycles of the crypto market.

In periods of low speculation, the token could lose liquidity, thereby affecting its integration into products like ODL. This could also open the door to alternative solutions, such as the stablecoin RLUSD, already considered by some community members as a potential replacement for XRP.

However, Ripple continues to deny any intention of replacing XRP with a stablecoin in its payment solutions. Garlinghouse’s statements, cited by the SEC, even suggest the opposite: speculation remains an asset to strengthen the use of XRP in its products, despite lingering doubts.

The impact of the lawsuit on XRP’s performance

The approaching deadline for an appeal in the lawsuit against Ripple seems to be weighing heavily on XRP’s current performance.

The token’s price is stagnating around $0.59, with transaction volumes relatively low compared to previous peaks.

This situation reflects the general uncertainty surrounding the outcome of the lawsuit. If Ripple loses on appeal, this could not only affect the value of XRP but also call into question its role in the crypto ecosystem.

However, some observers remain optimistic. According to them, if Ripple manages to avoid the appeal or secure a favorable outcome, XRP could experience a rapid rise, fueled once again by speculation. In a market as unpredictable as cryptocurrencies, speculation remains a key factor – whether to drive the price up or keep it afloat. Moreover, Bitcoin remains unrivaled and Ethereum is collapsing.