XRP prices tumbled 8.5% in a day, dropping the most among the largest cryptocurrencies, as digital asset markets suffered a sudden sell-off Wednesday.
The token fell to as low as 46.18 cents, its lowest level this month, according to CoinDesk Indices data. XRP’s price hit almost 56 cents on Tuesday, as traders bet that a much-anticipated document release related to an on-going lawsuit between payment firm Ripple Labs and the U.S. Securities and Exchange Commission (SEC) could send XRP higher.
XRP’s sharp downturn happened as bitcoin (BTC) and ether (ETH), the two leading cryptocurrencies by market capitalization, lost key price levels Wednesday afternoon after the Federal Reserve’s latest interest rate decision. Despite the Fed pausing its rate hike campaign after 14 months, an event most traders thought would be bullish for prices, BTC and ETH dropped below $25,000 and $1,700, respectively, to 3-month lows.
The SEC sued Ripple in 2020 alleging that the firm sold unregistered securities, namely XRP. Ripple, however, historically has distanced itself from the token, which powers some of its products and the XRP Ledger network.
XRP rallied earlier this week amid the release of emails from William Hinman, former director of SEC’s Division of Corporation Finance. Optimistic traders bet that Hinman’s speech would underscore SEC flawed reasoning for deeming the token a security, pointing to a favorable outcome for Ripple Labs in its on-going lawsuit between the firm and the SEC.
“Currently, we observe huge speculative narratives around Ripple, which could potentially lead to a significant price increase for XRP in the next three to four months, pushing its value to anywhere between $10 and $30,” crypto hedge fund manager Thomas Kralow said in a note earlier this week.