As the Chairman of the Securities and Exchange Commission (SEC), Gary Gensler, prepares to resign, a cryptocurrency that was once targeted under his leadership is experiencing significant growth.
XRP, a cryptocurrency widely used by the fintech company Ripple Labs, has seen a surge in price on Thursday as Gensler announced his resignation from the agency's leadership position when President-elect Donald Trump takes over the White House in January.
As of now, the price of XRP has increased by 20% over the past day, reaching a high of $1.49 this morning, the highest level since May 2021.
Although XRP has been one of the largest cryptocurrencies by market capitalization since its launch in 2013, the SEC accused this asset of being a security in a lawsuit filed in 2020. While a federal judge ruled that this token "does not necessarily have to be a security in its appearance," uncertainty around regulations remains, with the SEC appealing this decision.
Bitwise's Senior Investment Strategist, Juan Leon, said the rise in XRP's price stems from hopes for a favorable regulatory environment under Trump. While the SEC has been pursuing Ripple Labs in court for years, a change in leadership could bring new opportunities, depending on whether the SEC decides to drop its four-year-long lawsuit.
"Ripple Labs and XRP have been embroiled in lawsuits with the SEC since 2020, which has severely hindered their business prospects," Leon commented. "Now, with Gensler's impending departure and XRP's launch of a stablecoin, investors are anticipating a clear path for XRP to fulfill its mission as a B2B blockchain payment network."
On Election Day (11/5), XRP was trading around $0.50. However, since Trump's victory, the token's price has nearly tripled, becoming one of the largest post-election gainers, alongside ADA.
Meanwhile, Ripple's CEO, Brad Garlinghouse, has been advising Trump's team, according to the New York Times. The newspaper reported last week that Garlinghouse had spoken with people close to the President-elect about personnel decisions under the new Trump administration.
With the change in SEC leadership likely to bring a more crypto-friendly regime, investors' access to XRP has recently been expanded in the US. For example, earlier this month, the investment app Robinhood listed this token for trading on its platform.
Last month, Ripple's General Counsel, Stuart Alderoty, stated that Gensler wanted to maintain "a cloud of uncertainty hanging over the crypto industry" with his appeal. However, he argued that the SEC's appeal is likely to fail, dispelling that cloud of uncertainty permanently.
Although the SEC has sought a $2 billion penalty against Ripple for XRP transactions, claiming the company violated securities laws, a federal judge ordered Ripple to pay a $125 million fine in August. The judge found that XRP transactions with institutions violated securities laws, but not the transactions that made the token available to retail investors.
Connor McGlaughlin, a prominent YouTuber and XRP investor who has dedicated his Mickle Markets channel to supporting this cryptocurrency, said he believes the coin is rising in price as concerns about its regulatory status diminish.
As the SEC's lawsuit appears to be increasingly in trouble, McGlaughlin - who has posted pro-XRP videos related to Gensler in recent days - sees new optimism among the coin's supporters.
"With the potential for a favorable resolution and the prospect of a more crypto-friendly regulatory environment under the new administration, faith in XRP is growing," he said. "The market is waking up to this potential, driving the current excitement and price momentum."
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