Cryptocurrencies are able to recover recently especially after a bearish month of June. Bitcoin was even able to return to $7,500 momentarily. Aside from Bitcoin, Ripple was able to make the $0.50 mark. However, there are some questions that need to be answered.
Ripple experienced going as high as $3.40 before backing down to below $0.50 these days. These days, there are different concerns pertaining to the cryptocurrency. As US Securities and Exchange Commission considered Bitcoin and Ethereum as commodities, Ripple received three lawsuits.
Last week, Steven Cohen who owns Cohen Private Ventures invested in Autonomous Partners which is a new hedge fund that buys cryptocurrencies and equity from different blockchain companies. It is worth mentioning that Ripple is absent from the number of technologies that Autonomous Partners is interested in. And the primary reason is the fact that US Securities and Exchange Commission is still not considering Ripple as a commodity. There is always that possibility that it can be considered a security which then requires it to meet regulations applied to financial instruments.
A Lot of Concerns About Centralization
Arianna Simpson who works from Autonomous Partners mentioned that “I have a lot of concerns about the level of centralization there, and I have regulatory concerns if what they have issued is a security”.
According to Anatoly Castella who is the CEO of Elpis Investments, XRP is not a “digital fiat”, and not a “real cryptocurrency”.
He also said that “Ripple resembles a fintech platform combining the best elements of fiat money and blockchain cryptocurrency”. He also mentioned that “it should be considered ‘digital fiat’, not a cryptocurrency”.
This isn’t actually helping the current situation of Ripple. Considering that there are lawsuits while SEC is still not making a decision whether or not to consider Ripple as securities or commodity, there is a chance that its price will drop any time. Castella believes that the SEC should consider having a special regulatory framework for this scenario. He believes that the regulation should be addressed on ‘digital fiats’ and other sustainable ecosystems for crypto startups. And because of this, the state of Ripple has been described by Castella as being “held in a state of limbo”.
For Castello, it is important to take the right regulatory approach. He mentioned that “this will ensure that ‘real’ cryptocurrencies like bitcoin will not be damaged and misunderstood by these start-ups adopting the wrong regulatory approach from the outset”.
And for this fundamental difference in Ripple and other popular cryptocurrencies, there is a possibility that there is going to be a “big dip” in XRP’s price. He mentioned that “Ripple cannot be compared to BTC or ETH. When bitcoin was originally created, it was designed to be a store of value. When you created a transaction, you were sending a store of value to another account- for goods and services”.
As for Ripple, he said that “Ripple has no mining or miners whatsoever. Instead, transactions are powered through a ‘centralized’ blockchain to make it more reliable and fast. XRP was mined all at once by the parent company—Ripple Labs Inc – with a majority of the cryptocurrency held by them”.
What exactly is in store for Ripple? Ripple has been involved in hiring different personalities to decentralize their system and to improve the overall flaws of XRP.