Ripple investors are a loyal lot, despite XRP posting YTD negative returns

Ripple investors are a loyal lot, despite XRP posting YTD negative returns

Ripple Labs, the crypto entity whose mission is to revolutionize the cross-border payments industry by replacing antiquated clearing organizations like S.W.I.F.T., seems to make headway with each announcement regarding its XRP-driven platform, but it appears to be one of those “two-steps-forward-one step back” kind of enterprises. Good news is usually followed by the executive team’s “dumping” of more tokens from its treasury on the open market to fund development activities and capital investments. The token started 2019 at $0.33, and now, over nine months later, it languishes at $0.25, a 24% loss YTD.

Brad Garlinghouse, the effusive CEO of the enterprise, always has something positive to say about future prospects, and he may actually be preparing an optimistic marketing piece for his annual “SWELL” conference. This year’s hyped event will occur in Singapore from November 7 to 8, and per its website, it will bring together “the world’s most trusted voices across financial services, payments, technology, and policy to share the reality of what’s unfolding in global payments today – and why it matters.”

The valuation for its XRP token typically receives a nice “bump” before and after this event. It tends to be a very positive presentation of what yesterday, today and tomorrow means in the scheme of payment things. Luke Martin, a popular crypto analyst on Twitter, recently shared this tweet, as reported by Ethereum World News:

$XRP moving higher, continuing to form rounded bottom. This is more than a technical story. The SWELL narrative should be a positive force for the next ~30 days. My favorite major alt chart for October.

Loma, a popular cryptocurrency analyst on Twitter, also added his bullish comments, along with the many other voices that contend that XRP is about to take off:

Honestly, really not a bad place to load up on XRP. I get the argument that it could break this support area (from where it went parabolic) but barring a disaster exclusive to Ripple, I think that would spell doom for many alts not just XRP.

For every positive mention, however, there are also quite a few on the negative side that are well acquainted with the habit of management to “dump” tokens, whenever the price point reaches a higher level. Soleil Du Soir, another popular crypto analyst on Twitter, could not resist stating the obvious: “The dump will be brutal.”

There have also been a few articles that reveal another more pressing problem for Ripple Labs, which has to do with how the SEC regards its practice of constantly selling tokens on the open market, tokens that may not comply with the restrictive registration, disclosure, and compliance regulations, if the token were classified as a “security”. The SEC has spoken favorably on behalf of Bitcoin and Ethereum and issued guidelines of how it will interpret the law going forward. The only problem is that XRP falls somewhere within a very “grey” area.

The FCA, the UK’s regulatory watchdog, has ruled favorably on XRP, but Garlinghouse may be his own worst enemy in the U.S. He recently stated to CNN that: “The long-term value of any digital asset is going to be derived from the utility it delivers,” while claiming that his token actually had more utility than Bitcoin.

Why was this use of words so bad? The folks at Cryptobriefing posit that the CEO may have crossed a serious line by saying that “utility drives value”. Their contention is that Garlinghouse has inferred that:

XRP should be expected to grow in value. This is dangerously close to what the SEC could conceivably regard as constituting a promise of capital growth. (Not to mention, current guidelines suggest that creating tokens for the express purpose of building a network is also a major no-no.)

Ripple Labs needs to get this issue resolved with the SEC or there will be a dark cloud of potential fines, penalties, and much worse, refunds, hanging forever over its head.

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