Prices That Soared Return to Normal... Ripple Investors in Tears Over 'Rittosok'

Price Rose After Winning Securities Lawsuit but Plunged 36% from Peak
Weakness Continues Due to SEC Appeal and Tightening Concerns

Recently, the decline of the virtual asset Ripple has been significant. Although the price surged following analyses that Ripple Labs, the issuer of Ripple, had effectively won the securities lawsuit against the U.S. Securities and Exchange Commission (SEC), it has since given back all the gains. As Ripple's price shows weakness, the phrase 'Rittosok (getting fooled by Ripple again)' has reemerged among investors.

According to the global virtual asset market tracking site CoinMarketCap, as of 10:58 AM on the 23rd, Ripple's price was recorded at $0.52 (approximately 695 KRW), up 0.06% from the previous day. While Ripple's price showed a slight upward trend that day, the overall decline was more pronounced compared to before. It dropped 14.18% compared to a week ago and plunged 29.05% compared to a month ago.

Earlier, Ripple's price surged following a favorable ruling for Ripple Labs in the lawsuit with the SEC. In February, the SEC filed a lawsuit against Ripple Labs, claiming Ripple was an unregistered security. However, on the 13th of last month, New York District Court Judge Analisa Torres issued a summary judgment stating that Ripple Labs' sales of Ripple to general investors on exchanges did not violate federal securities laws. However, the court found that sales of Ripple to institutional investors such as hedge funds did violate federal securities laws. Since the court did not fully accept the SEC's claims, Ripple's price soared.

Image source=Reuters·Yonhap News

Following this surge, Ripple's price climbed to $0.82 but then plummeted by more than 36%. It is now approaching the pre-surge price of $0.47. This weakness is due to news that the SEC plans to appeal the court's decision. The SEC reportedly filed an interlocutory appeal against the court's ruling on Ripple Labs' specific sales methods. The SEC aims to contest the legal interpretation that Ripple is not a security because individual Ripple investors did not expect profits from their investments and that Ripple did not meet the 'investment of money' criterion of the Howey Test.

In the U.S., the Howey Test is used to determine securities status. It considers whether: ▲ money was invested ▲ there was an expectation of profits from the investment ▲ the invested money was part of a common enterprise ▲ the profits derived from the efforts of others rather than the investor's own efforts. If these conditions are met, the asset is considered a security.

Tightening concerns also acted as a negative factor. As U.S. economic indicators exceeded expectations, hopes for a soft landing of the economy increased, leading to speculation that the Federal Reserve (Fed) might maintain a higher-than-expected benchmark interest rate. Additionally, the U.S. Treasury's increased issuance of government bonds raised bond yields, which negatively impacted the virtual asset market. Since U.S. Treasury bonds are virtually risk-free assets offering higher interest, funds have been flowing out of the virtual asset market.

There are also remarks that Ripple lacks relatively positive factors compared to other assets. Several asset management firms, including BlackRock, have applied to the SEC for Bitcoin spot exchange-traded funds (ETFs). If Bitcoin ETFs are listed, large purchases of Bitcoin would be necessary to manage these products, which is expected to be a positive factor. Furthermore, asset managers have also applied to the SEC for Ethereum futures ETFs. Although the SEC has previously rejected approvals for Ethereum futures ETFs, the market is optimistic about the possibility of approval. There is even anticipation that these ETFs might be launched sooner than Bitcoin spot ETFs.

In Ripple's case, there are almost no positive factors to reverse the current situation, leading to the phrase 'Rittosok.' This expression refers to situations where Ripple's price fails to rise as expected or even shows weakness. As of the end of last year, Ripple's market capitalization share on domestic KRW-market virtual asset exchanges was 17.2%, the second highest after Bitcoin's 21.2%, making Ripple's price movements highly sensitive.

This content was produced with the assistance of AI translation services.