Monthly Archives: Januar 2021

Ripple’s XRP explodes almost 60% – what’s behind the pump?

The past few months have been challenging for Ripple’s XRP owners . The cryptocurrency plummeted in price while the other top cryptocurrencies by market capitalization saw price growth that has not been seen in years.

Ripple’s XRP’s drop in price is due to the charges brought against Ripple Labs and two of its executives in December. The SEC’s charges include the sale of over $ 1 billion in unlicensed securities based on the sale of Ripple’s XRP. The SEC claims that Ripple’s XRP is a security – a designation that has not been assigned to the two major cryptocurrencies, Bitcoin and Ether.

That announcement resulted in a price drop of over 50 percent as many platforms using RippleNet and Ripple’s XRP ceased operations over these allegations. These platforms are not regulated by the SEC and want to stay that way.

As such, these allegations could bring them under US jurisdiction if they are involved in the sale of securities to users. Even regulated firms like Grayscale, the largest digital asset manager in the cryptocurrency space, reduced the Crypto Revolt holdings after this announcement.

Ripple is fighting back

Many stakeholders in the XRP ecosystem were extremely upset by these claims. Some filed petitions.

Some have turned against the SEC for waiting seven years after Ripple’s XRP launched to take action. Others sued platforms like Coinbase for allowing the unregistered sale of securities.

Aside from all of the drama surrounding these allegations in late 2020, Ripple responded legally to the allegations. In the filing, they alleged that the charges are based on „an unprecedented and ill-conceived legal theory – with no legal mandate or authorization from Congress“.

Ripple says XRP is not a security

The Ripple Labs legal team states that Ripple’s XRP is not a security. They justify this with the fact that “XRP performs a number of functions that differ from the functions of“ securities ”, as the law has understood this term for decades. For example, the token functions as a medium of exchange […] It is not a security and the SEC has no authority to regulate it as such ”.

Ripple Labs, Brad Garlinghouse, and Christian Larsen claim that since the token acts as a „currency,“ which is a means of storing and transferring value, the SEC has no jurisdiction over it as a security.

However, Ripple Labs and the other two defendants allegedly sold over $ 1 billion to Ripple’s XRP to fund their businesses – and for personal reasons. This has traditionally not been possible with a privately issued “currency”. For now, Ripple’s XRP will remain pending, but it should be very interesting to see how the SEC reacts.

However, the crypto community seems happy that Ripple is officially reacting – at least if the price can be an indication of it.

Chainlink surpasses Bitcoin Cash making LINK the 8th largest cryptomeda

The market capitalization of the Chainlink has exceeded Bitcoin Cash as the DeFi market continues to thrive, with total allocated value exceeding $24 billion.

Chainlink exceeds Bitcoin Cash making LINK the 8th largest crypto and NOTICS in the market

Chainlink (LINK), the blockchain protocol focused on oracle, has surpassed Bitcoin Cash (BCH) to become the eighth largest cryptomeda as of January 18.

Chainlink’s market capitalization now stands at around $9 billion and about $500 million from the next largest crypto asset, Litecoin (LTC).

1-day LINK/USDT (Binance) chart. Source: TradingView.com
Why is Chainlink growing so fast?
The price of the Chainlink has risen 13% in the last 24 hours and the LINK dynamic probably comes from the positive feeling around DeFi.

The DeFi market as a whole has had a strong bullish rally over the last few months with AAVE and SUHI being the latest highlights. The upward trend can be attributed to the fast growing metric called total allocated value (TVL), which measures the amount of capital deployed in DeFi protocols.

On 18 January, TVL among the DeFi protocols was estimated at about US$24 billion and is still growing rapidly.

Total amount allocated in Defi. Source: Digital Assets Data
Chainlink benefits from the growth of the DeFi space because oracles feed crucial market data into DeFi protocols.

When DeFi protocols, such as loan platforms or exchanges, search for pricing data, they get it from oracles such as Chainlink and Band Protocol.

As such, when there are usually more users in the DeFi market, oracles benefit from the growing TVL of the DeFi market.

What comes next?
Analysts from Santiment’s network have discovered that inactive tokens continue to move. This trend has further fuelled the upward trend of several cryptomaps, including Bitcoin, Ether and LINK. They said:

„Inactive tokens continue to move at fast rates during this bullish run, and drops in our ‚Average Dollar invested‘ metric indicate an increased rate of $BTC, $ETH, $LINK, $LTC and particularly $REN (which triggered their week with massive increases of over 60% appreciation). ”
With LINK surpassing its historical maximum, it is now technically at „price discovery“. In technical analysis, price discovery happens when the value of an asset exceeds its previous ATH and starts looking for a new ceiling.

In addition to the positive technical aspects of Chainlink, the oracle provider also does not have many competitors beyond Band Protocol, which is based on the blockchain Cosmos network.

The network effect of Chainlink would probably act as another catalyst in the foreseeable future, especially as Ethereum (ETH) continues to dominate the DeFi space.