Why Ripple (XRP) Sinks As Trump Picks Pro-Crypto SEC Chair?

TL:DR;

Led by bitcoin, most of the cryptocurrency market is in the green today, but this is not the case for Ripple’s native token. This comes at a particularly confusing time, as Donald Trump picked a new SEC chair and is someone with a good history with the crypto industry.

Finally the Pro-SEC Chair?

It was roughly four years ago that the US Securities and Exchange Commission launched its lawsuit against Ripple, alleging that the company and two of its top executives illegally raised $1.3 billion by selling XRP tokens as securities not registered Since then, the case has seen many tribulations and developments, but most have gone well for Ripple, which has achieved some partial victories.

The lawsuit came close to being resolved this summer when a US judge ruled that the company must pay $125 million and settle. However, the SEC, still under Chairman Gary Gensler, appealed a 2023 verdict, thus expanding the case.

Donald Trump’s victory in the November 5 presidential election, however, changed the complexion of the game, as he had promised to fire Gensler on his first day in office. The current chairman of the SEC did not wait to be fired and announced his resignation a few weeks ago, which will become official on January 20.

All eyes in crypto turned to Trump, hoping for a kinder replacement at the helm of the securities regulator. His nominee is indeed pro-crypto, at least historically: former SEC Commissioner Paul Atkins. Accordingly, XRP should rise, right?

Why XRP is dumping?

Most of the aforementioned developments, including Trump’s victory and Gensler’s resignation, led to massive demonstrations for Ripple’s native token. The asset rose from $0.6 a month ago to nearly $3 earlier this week, increasing more than 400% in that time frame.

Now, however, XRP is down 12% on a daily basis, below $2.3. It also lost its place as the third largest cryptocurrency to Tether as its market capitalization dropped to $130 billion.

The timing is quite confusing, given the positive news coming from the incoming Trump administration. So far, the rally appears to have been a classic “buy the rumor, sell the news” event as XRP soared in anticipation of a big change at the SEC and is pouring once that change is made reality

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