Cryptocurrencies are on fire today — and XRP (CCC:XRP) is no exception. The recently hard-hit crypto was soaring, up nearly 50% on a 24-hour basis at one point. But what is behind the rally? And how should investors view Ripple (XRP) price predictions in late of recent drama?
For investors unfamiliar with the XRP news, there is a lot to unpack. Essentially, Ripple (XRP) price predictions were soaring to the moon ahead of December 2020. Things were picking up in the broad crypto space thanks to inflation fears, Covid-19 stimulus measures and the upcoming inauguration of President-elect Joe Biden. Specifically for XRP, news of a so-called airdrop was also boosting XRP prices. At one point, the crypto touched in at a high near 58 cents.
Then, things changed seemingly overnight. Just as institutional support for the crypto space was really strengthening, Ripple, the company behind XRP, was hit with a lawsuit. In it, the U.S. Securities and Exchange Commission claims that XRP is a security and not a digital currency. Although Ripple and its executives deny the claims, XRP price predictions and actual XRP prices plummeted. In fact, XRP closed out December near 20 cents.
With all of that in mind, how did XRP rocket to a 24-hour high above 36 cents? Well, investors can largely thank victories by Democrats Jon Ossoff and Raphael Warnock in Georgia. The slight Democrat lead in the Senate, combined with the Congressional confirmation of the Biden victory, is enough to once again stoke inflation fears. Plus, with Biden and fellow Democrats promising further Covid-19 relief measures, many crypto bulls see this as the perfect time to dive in.
So, dive in they did. Bitcoin (CCC:BTC) hit an all-time high above $40,000 today, and other cryptos are similarly soaring. Can XRP now revisit earlier price predictions?
XRP Price Predictions for 2021
Eyeing the situation, investors may be excited by the massive move in XRP today. It would almost seem as if bulls are forgiving it for the SEC lawsuit, which remains unsettled. However, experts are not so sure that the coast is clear for Ripple and XRP. Take for instance Denis Vinokourov, the head of research at Bequant. Yesterday, Vinokourov told CoinDesk that XRP will likely struggle until the SEC lawsuit is in the rear-view mirror, despite any broad crypto catalysts.
But what are those catalysts? And how might they impact XRP news in the future? Well, on Monday, the Office of the Comptroller of the Currency (OCC) said that banks can conduct payments using stablecoins. For XRP and fellow crypto Stellar (CCC:XLM), Vinokourov says that is a good sign. It reflects more institutional support, and more willingness by traditional financial players to embrace cryptos. Until the SEC drama settles, however, Vinokourov thinks XRP will not truly be able to benefit from the OCC decision.
Why is that? Well, a shadow really hangs on XRP and Ripple (XRP) price predictions at the moment. Several crypto exchanges have delisted it in the wake of the lawsuit, and Grayscale Investments has removed it from a large-cap crypto fund. For now, that means investors should certainly keep XRP on their radar. But beyond watching it closely, it may be good to wait for some legal clarity.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.