Summary XRP's regulatory clarity following the SEC case boosts its potential for institutional adoption and spot ETF approval, making it a compelling buy despite past reservations. Ripple CEO's announcement of the SEC case resolution led to a 12% XRP price jump, with further gains expected upon official SEC confirmation. The current market volatility and geopolitical tensions suggest a long-term holding strategy for XRP, as momentum trading is riskier now. The approval of XRP spot ETFs could dilute inflows for BTC and ETFs, but aligns with the increasing institutional interest and regulatory support for crypto assets. It's been exactly three months since I last wrote on Ripple ( XRP-USD ) here on Seeking Alpha. My last coverage heavily leaned on the RLUSD stablecoin and the opportunities it presents for the Ripple ecosystem, and the on-chain liquidity and use case it potentially creates for the XRP Ledger. In that piece, I hinted at XRP not being one of my favorite cryptos to hold in the current crypto market cycle. Here’s my reason in the excerpt from that article below: XRP isn't one of my favorite altcoins at the moment because I think it won't be among the most rewarding crypto assets in this bull season of the market cycle. XRP has had impressive runs in the last two bull markets, especially during the 2017 crypto bull market. However, in the spirit of the current crypto bull market, I'm upgrading my rating for XRP to a “buy” despite my reservations about XRP giving impressive gains moving forward. Excerpt from previous XRP coverage Prior to that article, XRP had rallied for months after a federal judge gave Ripple a slap-on-the-wrist fine of $125 million (compared to the over $2 billion fine the SEC was pushing for), with an injunction order against securities laws violation in the future. The SEC had tried to appeal the ruling. Additionally, President Trump’s pre- and post-election “Trump effect” on the crypto market was still in full swing at that time. And following that article, XRP (as well as much of the crypto market) rallied further, until halted by the steep market correction we’ve seen recently due to geopolitics - mainly tariff wars - which has also affected the broader equity market. XRP has built a die-hard following over the years that the power of its community has enabled XRP to become one of the cryptocurrencies that's hard to ignore. XRP makes the news one way or the other. Over the years, the SEC’s years-long case with XRP garnered much attention that the SEC vs XRP case was thought of as the litmus test for how crypto issuers launch and distribute crypto tokens. Today, Ripple Labs CEO Brad Garlinghouse announced on X that the SEC vs Ripple four-year-long legal brawl was finally over. Brad’s announcement is technically unofficial as the SEC is yet to make an official declaration, and according to Brad, the SEC would drop its appeal on the ruling made by the federal judge in August last year. XRP price action following Brad Garlinghouse's announcement (Seeking Alpha) The “unofficial” announcement from the CEO saw XRP jump ~12% from the daily open price of $2.28, to reach a daily high of $2.59. XRP closed March 19 at $2.55. I think in the coming weeks, when the SEC formalizes its decision, and the SEC makes the official announcement, XRP price could gain further on the news if momentum returns to crypto in general. The SEC case with Ripple was not a nothingburger for Ripple, and it has limited XRP adoption over the years. Though Ripple Labs focuses on building tech that is institution-grade out of the box, XRP was largely shunned by institutions due to the risk of enforcement actions. Now that the case is coming to a close and the regulatory classification of XRP is clearly defined, XRP and Ripple products are bound to see broader adoption, especially by institutions. An XRP ETF, Anyone? Crypto spot ETFs are becoming mainstream and a slew of approval for major crypto assets are likely to happen in the future, with the current U.S. government friendly stance toward crypto. I'm viewing the spot ETFs like the early days of crypto tokens after ICO launches on Ethereum made them possible. The early crypto tokens had the advantage of garnering enough liquidity. Launching of crypto tokens is effortless these days, and hundreds (if not thousands) of tokens (mostly meme coins) are launched daily; therefore, there is thinner liquidity spread among altcoins. We’ve seen how the “alt season” has been delayed in this market cycle, and utility tokens have had to grapple with fragmented liquidity. I foresee a similar trend with crypto spot ETFs. For now, only Bitcoin ( BTC-USD ) and Ethereum ( ETH-USD ) spot ETFs have been approved in the U.S., and they enjoy all the demand and inflows into spot ETFs. In the event that the floodgates to approvals open a bit more, and more spot ETFs see approval, there will likely be diluted liquidity distribution among these ETFs, which will impact their demand ratio, in my view. Spot ETF proposals have already been filed for Solana ( SOL-USD ), Cardano ( ADA-USD ), Avalanche ( AVAX-USD ), as well as XRP. Following today's announcement, Brad stated emphatically in a Bloomberg interview that XRP will be added to the U.S. Digital Asset Stockpile, and he is confident that XRP spot ETFs will come before the year ends. As for XRP’s inclusion in the U.S. Digital Asset Stockpile, that's out of the scope of my investment thesis. The likelihood of seeing XRP spot ETFs this year aligns with my analysis, and I lean towards agreeing with him. XRP’s regulatory definition is coming at a timely moment when it is likely that the XRP spot ETF will be the next to see approval. Ripple CEO has been one of the crypto execs lobbying the White House for clearer policies that will favor the industry since President Trump assumed office. He was present at the first-ever White House Crypto Summit, and it is rumored that among the crypto execs lobbying the White House, Brad is one of the favorite candidates to likely be on the White House Crypto Advisory Council . The CEO’s engagements with the White House brings Ripple a step closer to having a main seat at the policymaking table. This bodes well for Ripple Labs as a company and is bullish for XRP. Risks and Takeaway The last weeks have been highly volatile for crypto assets. President Trump's positive stance towards crypto has been overshadowed by his own macro policies, particularly the tariffs. Technical charts are uncertain at the moment, and the uncertainty and doubt is heightened throughout the market. XRP’s new regulatory clarity is the type of news that should typically create sustained momentum for the crypto asset; however, in the current FUD-filled clime of the market, gains have been short-lived. I think it’s best to have a longer-term view if you plan to hold crypto assets, including XRP. Momentum trading is currently riskier. Regulatory clarity for XRP means potential spot XRP ETFs approval, and it opens doors to more institutional partnerships for Ripple. If the crypto market still has momentum left in this cycle, I expect XRP to deliver at least modest returns from here, now that the shackles are finally off.
