XRP erases gains from Ripple’s partial victory as Bitcoin falls 10% in a week

Bitcoin hovered around US$26,500 in Friday afternoon trade in Asia after hitting a two-month low of US$25,400 in the morning. The depreciation of the Chinese yuan and the bankruptcy of Chinese property giant Evergrande in the U.S. damaged investor sentiment for risk assets. All other top 10 non-stablecoin cryptocurrencies by market capitalization declined with XRP dropping the most as the U.S. Securities and Exchange Commission (SEC) received approval to file an interlocutory appeal in its lawsuit against Ripple Labs. 

See related article: Will Singapore steady the stablecoin ship?

Bitcoin faces downward pressure

Bitcoin dropped 7.59% to US$26,413 in 24 hours to 4 p.m. in Hong Kong, bringing its weekly losses to 10.08%. The world’s biggest cryptocurrency’s market capitalization also dropped 6.80% to US$516.53 billion, according to CoinMarketCap data.

“The Bitcoin price has tumbled to around US$26,000 due to a mix of events. Two events really had the largest influence, which are Elon Musk’s SpaceX decreasing Bitcoin holding of US$373 million last year and the news of SEC now [allowed] an appeal to XRP ruling, fueling further anxiety for investors,” said Lucy Hu, senior trader at Hong Kong-headquartered digital asset management platform Metalpha.

“But we remain hopeful in the medium to long term as possible rate cuts will favor risky assets investment as well as approval of BTC spot exchange-traded funds in the U.S.,” Hu added.

In the U.S., many asset managers are awaiting SEC approval to launch several spot Bitcoin ETFs, including BlackRock. The SEC was expected to announce its decision on Ark Investment’s spot Bitcoin ETF application on Aug. 13 but the agency said it will solicit public comment on the ETF proposal, thereby pushing back the deadline.

“As the fiat-to-crypto on-ramp is heavily impaired, after dismantling the Silvergate Bank, Silicon Valley Bank, and Signature Bank trio in the U.S., crypto desperately needs to onboard many users that could provide fresh capital into the asset class,” Markus Thielen, head of crypto research at digital asset service platform Matrixport, wrote in an emailed note. The weakness in the Mainland China economy could impact Bitcoin investors, he added.

“A U.S.-listed Bitcoin ETF could be meaningful as it would also be associated with a significant market push that could benefit the asset class,” Thielen said, adding that since Bitcoin prices are breaking the 2023 uptrend, prices might fall back and re-test the US$25,000 support level associated with the BlackRock Bitcoin ETF filing. 

Ripple’s XRP posted the day’s biggest loss, dropping 14.02% to US$0.5065 in the last 24 hours, a 19.86% loss on the week. The drop in prices came after the SEC was granted permission to file an interlocutory appeal in its lawsuit against Ripple Labs. The SEC had sued Ripple in December 2020, alleging that the company was offering an unregistered security.

“The request for appeal (even if granted) doesn’t change the fact that XRP is not a security. That’s not up for debate/trial. But the SEC continues to claim that Chris and I acted recklessly in believing that XRP is not a security. That’s utter nonsense,” Brad Garlinghouse, the chief executive officer of Ripple Labs, tweeted on Thursday. 

The total crypto market capitalization dropped 6.30% to US$1.06 trillion, while crypto market volume jumped 96.63% to US$70.05 billion.

Wreck League NFT launch underwhelms

The indexes are proxy measures of the performance of the global NFT market. They are managed by CryptoSlam, a sister company of Forkast.News under the Forkast.Labs umbrella.

The main Forkast 500 NFT index dropped 0.68% to 2,433.55 in 24 hours to 6.10 p.m. in Hong Kong, and posted a 2.41% decline on the week. Forkast’s Ethereum, Solana and Polygon indexes all logged losses in the past 24 hours. 

Wreck League, an NFT video game backed by Hong Kong-based gaming company Animoca Brands, launched its NFT mint on early Friday in Asia but the collection has received poor response so far.

“Wreck League is underperforming tremendously, and so far has struggled to sell even one-third of its debut collection,” Yehudah Petscher, NFT strategist at Forkast Labs, said. “There will be an impact on the market, in the sense that this will not help the confidence of traders in other collections.”

At the same time, non-fungible token (NFT) sales volume rose 34.11% to US$20.46 million, according to data from CryptoSlam. NFT transactions dropped by over 13% while the number of buyers dipped by 20.67%.

Ethereum topped blockchains by NFT sales volume, gaining 81.08% to US$14.54 million in the past 24 hours. Solana and Polygon networks ranked second and third respectively.

By collections, the sales volume of Ethereum-based Bored Ape Yacht Club jumped 295.11% to US$2.05 million, while that of DeGods climbed 39.33% to US$1.51 million in the past 24 hours.