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The aftermath of the recent SEC ruling on Ripple has been intriguing. Some of the comments from cryptocurrency news websites make it seem like the second coming of Satoshi.
Frankly, this situation poses a challenge for cryptocurrency investors. One major question it raises is whether Ripple should be classified as a financial instrument, i.e., a cryptocurrency or a security.
If considered a stock, Ripple, along with other crypto companies, should have registered with the SEC. On the other hand, if it’s not classified as a stock, it opens the door for the cryptocurrency industry to freely create new tokens, which could have overall advantages.
According to the court’s verdict, Ripple is not deemed a stock when traded on exchanges; it only attains that status when sold to significant investors. This decision may be disappointing for those seeking a clear regulatory ruling.
From my perspective, it feels like we’re back to square one. So, it’s puzzling why investors are getting so excited and driving up the price of XRP.
Is Investing in Ripple a Wise Decision at This Time?
Initially, we had strong faith in Ripple and its vision of becoming the world’s premier global remittance platform, utilizing blockchain technology for instant and almost free cross-border payments. In fact, our first analyst report centered around Ripple’s token, XRP.
However, the SEC’s lawsuit against Ripple in 2020 compelled us to reassess our position. We could no longer, in good conscience, advise new investors to invest in XRP.
Anticipate More Conflict Ahead
The recent court verdict has been creating significant ripples for some time now. The SEC has the option to challenge the judgment, which cannot be quashed at this moment. On the other hand, Ripple might also appeal certain sections of the decision they disagree with, which means this legal battle will likely continue for an extended period.
Interestingly, the court’s ruling found Ripple guilty of selling an unregistered security to large investors, but this crucial aspect seems to be overshadowed by the prevailing excitement.
Furthermore, when it comes to cryptocurrency investment, the most crucial question to consider isn’t simply whether the token’s price will go up or down. Focusing solely on that aspect would be the least prudent approach in this regard.
Rather than relying solely on emotion, we rely on careful judgment and thorough analysis to assess whether Ripple qualifies as a reputable business, led by competent executives, and boasting a substantial and growing customer base.
It’s understandable why everyone is so passionate about this issue, given the months of unfavorable news from the SEC. This recent minor victory feels like a momentary relief. However, in the world of cryptocurrency, it’s just another twist in the roller coaster ride.
Do not invest based on FOMO (Fear of Missing Out), as it’s spreading rapidly. Instead, focus on investing in high-quality crypto projects as a portion of a well-balanced portfolio. Above all, adopt a long-term perspective, thinking about a span of 5 years or more.
While there’s still a significant journey ahead, it’s undeniable that even a small victory feels gratifying for now, even if it’s just a minor contribution to the bigger picture.
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