Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
XRP has been at the center of the debate around cryptocurrencies in the U.S. for some time now. The victory in the court case and the settlement being talked about recently, coupled with the ongoing bull run, have pushed the token towards a remarkable price rally.
Since mid-October, XRP’s price has risen by more than 40%. At the time of writing, it was exchanging hands at $0.67771. Its market cap stood at $37.1 billion, making it the fifth-largest cryptocurrency.
SEC-Ripple saga: How it began
Ripple has been at loggerheads with the U.S. Securities and Exchange Commission (SEC) for years now.
It was in December 2020 that the SEC charged Ripple with raising more than $1.3 billion in 2013 by selling XRP in an unregistered security offerings to investors. Ripple, in response, argued in the court that XRP could not be treated as security.
The U.S. District Court of the Southern District of New York became the battleground for this legendary crypto-case over time.
The SEC claimed that Ripple’s platform used XRP tokens to fund itself, which facilitated money transfers for retailers. The sales of XRP tokens also enriched the platform’s management.
The SEC also relied on the SEC vs. W.J. Howey Co. case to make its case. A landmark Supreme Court case in 1946, it has become the benchmark to determine whether or not a transaction falls within the Securities Act of 1933’s definition of an investment contract.
According to the Howey test, the investor’s control over the profit is crucial in deciding whether an investment contract is a security or not. If the investors have no influence over the asset, it is usually considered a security.
Ripple argued the SEC neither warned or notified the organization. The regulator also accepted that Ripple wasn’t notified that XRP could be classified as a security.
The regulator’s enforcement action naturally had a negative impact on the token as multiple exchanges suspended XRP trades on their platforms. Between 2021-23, the fortunes of XRP remained dull due to the negativity surrounding the token.
Court delivers a partial judgement
In July 2023, the judge ruled that the sale of XRP tokens to retail investors over exchanges and through programmatic sales did not constitute investment contracts; hence, it was not a security in this case.
However, the court also ruled that the institutional sale of the XRP tokens violated federal securities laws. Therefore, it should be treated as security in this case. The court also remarked that Ripple actively targeted institutional investors with its marketing, highlighting that the business endorsed a speculative value thesis for XRP.
The court concluded that $728.9 million in XRP sales made by the exchange constituted unregistered sales of securities, giving the SEC a partial victory.
The impact of these judgments was assessed by ChatGPT in a previous article by AMBCrypto. XRP immediately surged by 90% to $0.908 post this partial victory for Ripple.
In late July, Ripple issued its Q2 2023 market report in which it gave an in-depth response to the partial win. The report claimed the SEC’s lawsuit against the exchange was misguided and a “quest for political power.”
In early August, the court issued a pre-trial scheduling order. The order stated,
“The Court will seek to schedule a jury trial for the second calendar quarter of 2024.”
But things didn’t end at this point. The SEC remained adamant in pursuing the case further and Ripple didn’t want to let go of it either.
In October, the court denied the SEC’s bid to appeal against the judgement in favor of Ripple.
Then, it came to light that the regulator was demanding a huge settlement of $770 million from the company. The SEC alleged violations of Federal Securities Laws on the part of Ripple in its institutional sales of XRP tokens.
Then, the figure apparently came down to $20 million. It prompted pro-Ripple crypto-attorney John Deaton to claim that the case’s outcome leaned heavily in Ripple’s favor, presenting a striking 90/10 advantage. He refuted the larger claim that viewed the court’s partial judgement as a 50-50 victory for Ripple.
The people who’ve argued that the SEC got a 50-50 victory in the @Ripple case are 💯 wrong. It was more like 90-10 in Ripple’s favor. If Ripple ends up paying $20M or less it’s a 99.9% legal victory. https://t.co/Xe6SYBiTCJ
— John E Deaton (@JohnEDeaton1) November 4, 2023
Ripple CEO Brad Garlinghouse recently hinted during an interview that he was determined to see the legal battle through to its conclusion. He expressed his readiness to take the matter to the highest court.
‼️ JUST IN ➡️ BRAD GARLINGHOUSE ➡️ FULL CONVERSATION ➡️ DC FINTECH WEEK 2023 ➡️ WHAT´S NEXT FOR RIPPLE? @bgarlinghouse @Ripple #regulations https://t.co/LKR3LUlFRz pic.twitter.com/ZYASgN2fJ5
— XRP DROPZ (@DROPZXRP) November 8, 2023
Let us now dig deeper as to how it has been trading in the market amid the bull run and how the case affects its performance.
The AI solution offered by ChatGPT can certainly be used to attain some clarity. Let’s see what it says about the case and its impact on XRP’s price trends.
We asked ChatGPT to decipher some fundamental questions
Note that ChatGPT has limited access to information until 2021 only. That makes it difficult to pull data beyond 2021, let alone make future predictions—something which OpenAI’s policy firmly prohibits. Ergo, we followed ChatGPT jailbreak techniques to bypass some of these limitations to try to get modest XRP price predictions.
We asked ChatGPT about the possibly negative impact of Ripple’s TradFi past on the broader crypto sector.
Source: ChatGPT
The Classic version mentioned the criticism of the centralized nature of Ripple that didn’t align with the core principle of cryptocurrencies, i.e. decentralization. However, the bot termed these critics as “cryptocurrency purists.”
It further claimed that Ripple’s association with TradFi institutions and its engagement with the question of regulation have brought a level of “legitimacy” to crypto.
The jailbroken version also responded along the same lines. It said Ripple’s TradFi background bridged the legacy finance world and the latest crypto-realm. It claimed that many saw it as a pragmatic approach to navigating the complex regulatory landscape.
We then asked ChatGPT how it sees the Ripple-SEC court case evolving in the future as it reaches the highest court.
Source: ChatGPT
While the bot asked us to hold onto the hope, it didn’t comment on the future outcome. However, it talked at large about the implications of a positive outcome for Ripple.
In that case, XRP would soar to new heights and will be embraced by the global financial ecosystem, ChatGPT added.
Now we know the fundamental analysis and market sentiment, especially from the lawsuit angle. Let us see if it can predict XRP’s future performance.
Would ChatGPT be helpful on this front too? Let’s see.
Can ChatGPT predict future price trends of XRP?
We asked ChatGPT to predict the price of XRP towards the end of the year. It jailbroken version forecasted the price of $5.
Source: ChatGPT
In essence, the AI bot was expecting XRP to surge 7x within two months, November-December. To put it into perspective, the token has surged only 1.5x since mid-October even amid the current bull run.
We thought about providing the bot with more context about the court judgement and the ongoing bull run for it to make a more judicious prediction.
The details humbled ChatGPT as it now predicted XRP’s price to hit $2 only by the end of 2023—A rise of 2.8x.
Source: ChatGPT
ChatGPT is a useful tool, particularly for fundamental and technical analysis. It can quickly retrieve historical data and do fundamental analysis on XRP.
Though ChatGPT is limited to data only until 2021, circumventing its limitations does not ensure reliable output. However, we attempted this and were moderately successful in achieving price predictions.
As a result, human involvement is critical in making sense of some AI model data.
Looking at XRP’s on-chart indicators
The recent bull run has led to price rally across tokens. In fact, XRP was trading at $0.67771 at press time.
Source: XRP/USD, TradingView
Both XRP’s Relative Strength Index (RSI) and Money Flow Index (MFI) rested much above the neutral 50-mark. Its on-chart indicators suggested a further price rally for XRP too.
Conclusion
ChatGPT first said that XRP could rise 7x to $5 by the end of 2023. Finding it to be too astonishingly high, we provided the bot with more details. It then forecasted XRP to rise to $2 by the end of the year.
As far as its on-chart indicators are concerned, they suggested a further price rally even as we are witnessing a bull run. It is quite possible that given the recent rally, ChatGPT’s prediction might indeed come true.
Is your portfolio green? Check out the XRP Profit Calculator
ChatGPT can be a smart help in predicting price trends. Nonetheless, traders are advised to do their own independent research before investing in any asset, including cryptocurrencies.
