Ripple (XRP) suffered a significant correction today, falling nearly 15 per cent to a low of around $0.332728 before recovering a little bit.
It’s been a bad day for cryptocurrencies today with market-wide downtrends that saw the total market cap for all cryptos drop about 11 per cent in a matter of hours.
Amongst the top ten, Ripple’s native XRP token was one of the worst affected coins, dropping nearly 15 per cent.
XRP subsequently recovered a little bit and is currently trading at$0.341366 as of 9pm, ET, according to averaging data from CoinMarketCap.
SEC delays decision on Bitcoin ETF
The reasons for the crash remain unclear; some believe its down to a move made by the SEC (U.S. Securities and Exchange and Commission) to delay making a decision on whether to accept another application to create a Bitcoin ETF (exchange-traded fund).
This would explain Bitcoin’s dip and, generally speaking, when BTC takes a hit most other altcoins tend to follow suite, so to speak.
Today’s correction was particularly harsh; of the top coins, Ripple XRP, and EOS probably suffered the worst but all coins recorded some pretty heavy losses.
In fact, the altcoins were generally hit worse than Bitcoin itself which caused some to speculate that people were panic selling altcoins for Bitcoins and then either selling BTC for fiat or keeping their funds in BTC, which would explain why BTC suffered less than some other coins.
Rosen Law Firm investigates XRP
One possible explanation for XRP’s performance is the fact that on 7th August (yesterday), a global investor law firm, Rosen Law Firm issued a press release stating that it is investigating Ripple Labs, Inc. and XRP.
The firm said it’s investigating to see if Ripple has violated any federal security laws in association with the sale of XRP tokens.
According to reports, Rosen Law Firm is preparing a class action lawsuit, attempting to reclaim damages suffered by investors in XRP tokens.
As stated by CNN, the complaint read:
“Ripple’s public commitment to limit the supply of XRP had its intended effect. In the weeks that followed, the price of XRP rapidly increased, from approximately $0.22 per token on December 7, 2017 to $3.38 per token on January 7, 2018,”
While these claims of the XRP Ledger being controlled by Ripple have been debunked, many still believe that Ripple is in control of the currency itself.
Moreover, Ripple does not utilize the funds gained from the sale of XRP in the secondary market, which removes it from the definition of being a security.