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(Kitco News) - Thursday’s U.S. court ruling that XRP is not considered a security sent a wave of momentum rippling across the cryptocurrency ecosystem as many crypto traders took it as a sign to load up on their favorite altcoins in preparation for a major run-up in prices.
The biggest beneficiary of the announcement has been XRP, which is currently trading at $0.7755, an increase of 64% on the 24-hour chart. The trading volume for the token has exploded in the wake of the decision, spiking 1,980% from $677 million to $14.1 billion. As a result of the price increase, XRP is now the fourth-largest cryptocurrency by market cap.
There’s a good chance its trading volume will continue to increase as multiple exchanges that operate in the U.S. – including Coinbase, Crypto.com, Kraken Pro, and Gemini – have all signaled that they plan to relaunch XRP trading services, Many exchanges halted trading when the Securities and Exchange Commission (SEC) filed the lawsuit against Ripple Labs at the end of 2020.
“Getting in on the bandwagon serves these exchanges well as they can also benefit from the current surge in buying momentum and all associated fees that might trail the current hype,” said Greg Waisman, co-founder and COO of Mercuryo. “With the ruling and relisting, we can see that this case sets a good precedent for continuing a positive dialogue between the crypto industry and regulators”.
Stellar (XLM), a project closely associated with XRP, saw an even larger jump in its 24-hour trading volume, which surged 3,363% in the wake of the judgment and has XLM trading 45% higher than this time yesterday.
The ruling has been especially beneficial for the altcoin market, which had languished under the weight of regulatory uncertainty for months while Bitcoin (BTC) trended higher, bolstered by the filing of multiple spot BTC exchange-traded fund (ETF) applications by some of the world’s largest asset managers, including BlackRock and Fidelity.
Bitcoin dominance had been steadily climbing since bottoming out in September, reaching 52.2% on June 28, its highest level since April 2021.
Bitcoin dominance. Source: TradingView
The news of the XRP ruling and the momentum it brought to the altcoins resulted in a 3.35% drop in BTC dominance to 49.8% as altcoin prices spiked while BTC saw only minor gains, and it continues to struggle with strong resistance at $31,500.
BTC/USD Chart by TradingView
This development has led many crypto proponents to proclaim that altcoin season has arrived, as funds held in larger, ‘blue chip’ cryptos now begin to make their way into the broader altcoin market and smaller cap tokens.
“Alt season may be upon us following the Ripple news as indicators collectively suggest risk appetite is funneling down the risk continuum,” Decentral Park Capital said in a market update published Thursday. “With the U.S. dollar breaking down and the inflation battle nearing the end, it appears to be game on for investors.”
But caution is warranted as the data from past market cycles shows that the real altcoin season doesn’t usually take place until after the Bitcoin halving, and there is still plenty of runway for BTC to reassert its dominance ahead of the anticipated halving date of April 16, 2024.
Wen lambo???
— Stockmoney Lizards (@StockmoneyL) July 13, 2023
Altcoin season most likely after halving.#Bitcoin #altcoinseason pic.twitter.com/7vvUVJVB2s
Coinbase (COIN) has also emerged as a major beneficiary of the news as the price of its stock spiked 34.4% over the past 24 hours to hit a high of $114.40, its highest level since August.
COIN/USD Chart by TradingView
As a result of the tailwinds for Coinbase, the broker Needham maintained its buy rating on Coinbase shares and raised its price target to $120 from $70.
The cohort of traders that suffered the most from the XRP news were those who were shorting the market, as the spike in prices resulted in a total of $314 million worth of liquidations according to data provided by CoinGlass.
Liquidation heatmap. Source: CoinGlass
The widespread gains only made matters worse for shorts, as at least 39 tokens in the top 200 saw price increases in excess of 10% while many traders had anticipated a pullback in prices as the momentum from the spot BTC ETF filings began to fade.
U.S. House of Representatives Majority Whip Tom Emmer (R-MN) called the XRP ruling a “monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of,” and encouraged his fellow members of Congress to pass the proposed Securities Clarity Act “to provide the regulatory confidence needed to make sure the next iteration of the internet is designed with American values.”
The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Now, let’s make it law. ?? pic.twitter.com/FZtO1BzfWX
— Tom Emmer (@GOPMajorityWhip) July 13, 2023
