News

Ripple price trading sideways as the former CFTC Chairman says “XRP isn’t a security” | Invezz

3views
  • Ripple’s XRP should be seen as a currency rather than a security, claims Christopher Giancarlo
  • XRP/USD has continued to trade in the tight range, just below the $0.20 handle
  • The sellers, who seem to be in control of the price action, are likely to target $0.1750 next

Ripple price has been trading within a tight range in the past couple of days. In the meantime, the former head of the U.S. Commodity Futures Trading Commission (CFTC) noted that Ripple’s XRP is “not a security”.

Fundamental analysis: XRP is a currency, not a security

Christopher Giancarlo, the former president of the U.S. CFTC believes that Ripple’s XRP should be seen as a currency rather than a security.


Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

“The increased adoption of XRP as a medium of exchange and a form of payment in recent years, both by consumers and in the business-to-business setting, further underscores the utility of XRP as a bona fide fiat substitute,” Giancarlo and his colleague Conrad Bahlke, said

Giancarlo and Bahlke, currently work together in the international law company Willkie Farr & Gallagher, wrote an op-ed, where they stated that XRP isn’t an investment contract and for that reason, it isn’t security either, according to the Securities and Exchange Commission’s (SEC) Howey Test.

Bahlke and Giancarlo said that XRP “cannot be an investment contract as there is no contract or arrangement to speak of between Ripple and the overwhelming majority of XRP holders. To the contrary, the contracts that Ripple has entered into explicitly exclude general XRP holders as third-party beneficiaries.” 

They compared XRP to Bitcoin and Ethereum, saying just like the latter two aren’ securities under US regulations, XRP is also a currency decentralised enough to avoid being considered a security.

There’s no commonality among investors, they add. Investors hold XRP for different reasons, they said, as opposed to securities where reasons for owning it are more distinct. Some investors capitalize on low XRP/USD value, while others benefit when that value stays high.

“[G]iven the juxtaposition between XRP’s intended use as a liquidity tool, its more general use to transfer value and its potential as a speculative asset, XRP holders who utilize the coins for different purposes have divergent interests with respect to XRP,” said Giancarlo and Bahlke.

This view is completely different to Kevin Rose’s stance on Ripple’s XRP. The former Google employee and one of the early Ripple investors said earlier that he still doesn’t see XRP as a currency. 

Technical analysis: XRP/USD struggling to stay above $0.20

XRP buyers are still struggling to keep its head above the $0.19 – $0.20 zone as the sellers seem to be in control of the price action. Today’s close will be closely watched as the price action is currently threatening to close below the 100-DMA near the $0.19 mark. 

Ripple daily chart (TradingView)

A close and clean break of this support on the daily chart will open the door for a move lower, towards $0.1750, which is seen as an important support in the near-term. Investors looking to buy XRP will surely look at this level as an opportunity to get on the long side.

Summary

Ripple price is struggling to stay above $0.19 as the sellers continue to provide resistance to any bullish attempt. The next target for the sellers is $0.1750 as the former CFTC Chairman claims that Ripple’s XRP should be seen as a currency, not a security.