Bitcoin, Ether surge after Ripple notched partial win against SEC; Ripple’s XRP leads crypto rally

Bitcoin surged on Friday morning in Asia to breach the US$31,000 resistance level, after Ripple Labs achieved a partial victory in its three-year lawsuit against the U.S. Securities and Exchange Commission (SEC). The regulator  accused Ripple of offering XRP as an unregistered security. Along with Bitcoin, Ether and all other top 10 non-stablecoin cryptocurrencies logged considerable gains, with XRP spearheading the rally with a rise of over 70%. U.S. equity futures traded flat in the Asia time zone on Friday as investors await earnings reports from major U.S. banks. Thursday’s U.S. producer price index (PPI) has added to a sense that inflation is slowing in the country.

XRP ruling provides crypto market boost

Bitcoin climbed 3.45% over the last 24 hours to US$31,463 as of 07:50 a.m. in Hong Kong for a weekly gain of 4.93%, according to data from CoinMarketCap. The world’s largest cryptocurrency reached a high of US$31,814 early Friday morning, the highest price since June 2022.

In a summary judgement on Thursday,  New York Southern District Court Judge Analisa Torres ruled that Ripple’s programmatic sales of the XRP token on public exchanges do not constitute securities, marking a partial victory for Ripple with the SEC. The regulator first sued the San Francisco-based financial technology firm on the grounds that XRP constitutes a security in 2020.

The verdict came with a critical caveat, however.  The court ruled that Ripple’s XRP sales to institutional investors did violate securities laws.

Nonetheless, Ripple’s Chief Executive Officer Stuart Alderoty called the judgement “a huge win” in a Friday tweet.

Alderroty said that “the only thing the Court found constitutes an investment contract is past direct XRP sales to institutional clients.” Those transactions will now be subject to further court proceedings.

Despite the overall optimism in the crypto community evidenced by the upswing in the market, there are also a number of industry voices sounding a note of caution. 

In an emailed comment, CoinShares’ Head of Product Townsend Lansing said that the aspect of the ruling that identifies Ripple’s sales to institutional customers as a violation of securities law marks “a considerable victory for the SEC.”

The ruling will now set a precedent for legal action against other cryptocurrencies by regulators, he said.

“It is important to note that institutional investors who purchased directly from Ripple may find themselves subject to class-action litigation as potential underwriters,” Lansing added. “This is an area to watch closely, especially if big-name venture capitalists were involved.”

But, while some sense of jeopardy remained for those involved, Justin d’Anethan, head of APAC business development at Belgium-based crypto market maker Keyrock, believes that the ruling had at least “shook investors in the best of ways.” 

Elsewhere, Europe’s first Bitcoin exchange-traded fund (ETF) is set for a public listing this month. That follows a 12-month delay from the initially planned date, the Financial Times reported on Thursday.

Experts have identified the listing as another potential catalyst for the crypto market. 

“With the talks of ETFs in the background, the idea that we could see products tracking many cryptocurrencies is not implausible and traders are naturally positioning themselves accordingly,” said Keyrock’s d’Anethan.

Like Bitcoin, Ether surged 6.99% to US$2,004, moving up 7.69% for the week. The token is trading above US$2,000 for the first time since April.

Boosted by the ruling on the SEC-Ripple case, all other top 10 non-stablecoin cryptocurrencies rose in the past 24 hours. Cardano’s ADA, Solana’s SOL and Polygon’s MATIC each logged two-digit gains.

XRP, subject of the SEC’s lawsuit against issuer Ripple, jumped 72.75% to US$0.8142 and added 74.89% for the week. In doing so, it replaced Binance’s BNB as the third largest non-stablecoin cryptocurrency by market cap.

The total crypto market capitalization rose 6.19% in the past 24 hours to US$1.26 trillion, while trading volume jumped 95.72% to US$60.3 billion.