Ripple Braces For Turbulence

Good morning! Welcome to The Daily Moon. It’s a brand new week. And our favourite cryptopreneur Sam Bankman-Fried is back in the news. His company FTX Ventures and sister entity Alameda Research are supposedly merging. SBF has denied this news for now. Let’s see where this goes.

Moving on, today we talk about why Ripple has too much to handle and the Neutrino USD de-peg event.

The markets were in the red after further rate hike indications from the US Fed. Bitcoin fell to ~$20,000 levels while Ethereum slipped below $1,500. Nasdaq was down on a selloff in US stocks. Back home, Sensex and Nifty closed slightly higher.

Image by salesblog.at from Pixabay 

Ripple Faces A Frigid Weather

For the past two years, Ripple has put up a brave front. Be it token stability, regulatory struggles, or price pressures, it has claimed big wins. But now there is a bigger hurdle in sight. The European Union (EU) wants to expand on its own digital currency and issue a potential ban on stablecoins. This could pose trouble for crypto tokens such as Ripple’s XRP, which enables payments globally.

This is not the only irritant for Ripple. The crypto company is entangled in a legal case with the US SEC. XRP tokens have been delisted from major crypto exchanges because of uncertainty. To top it, the $1 mark looks elusive for XRP.

However, XRP has a moment to rejoice. The crypto token reported a positive sentiment well above rivals such as Bitcoin and Ethereum.

Circulation shows recovery A quick look at XRP’s activity over the past few weeks indicates higher circulation. NVT, which determines a token’s value in a network, showed that circulation rose in August.

With four straight months in the green, a Santiment insights report said that XRP holds promise.

Sounds good so far, right? Here’s where things get sticky:

• Active addresses: Active addresses, which are a way to determine if users will stay on a network, have been declining. On the XRP Ledger, it fell from 179,000 to 10,700 in the second week of August.

• Transaction volumes: The volume of transactions on the network has been volatile. The XRP network saw a sudden spike in the third week of August because of whale activity.

Meanwhile, the selloff continues. On the basis of market cap, XRP has slipped to the seventh position, even behind Binance’s stablecoin Binance USD.

The SEC fight club The US SEC has decided to regulate XRP. The securities regulator alleged Ripple conducted illegal security offering through sales of XRP. SEC wants XRP to be classified under securities (aka stocks). Ripple wants XRP to remain a virtual token.

The lengthy lawsuit has offered minor gains for Ripple, but investors are on the edge. Ripple CEO Brad Garlinghouse expects a resolution by the end of 2022. The courtroom drama has been a dampener for XRP’s price, which is down ~60% since the beginning of the year.

Exchanges stay away All crypto exchanges want to err on the side of caution. Crypto tokens are under regulatory scrutiny across the world and exchanges want to avoid unwanted attention. That means exchanges cease to trade on any tokens placed under watch.

When the SEC raised concerns against Ripple, major exchanges such as Coinbase and Binance US delisted XRP.

Not all is lost yet. Binance DeFi has added staking support for XRP, with additional rewards. Blockchain-based payment firm CoinGate relisted XRP, albeit for non-US users.

With more than 100 institutional partners, the list of opportunities for Ripple is endless. But XRP’s future depends on the outcome of the case with the SEC.

Neutrino Depegs, Again

Neutrino’s stablecoin faced a de-peg again. A network upgrade to the Neutrino protocol caused the algorithmic stablecoin Neutrino USD to lose its peg against the US dollar. The crypto token fell ~6% to $0.91 levels.

FYI Neutrino USD is an algorithmic stablecoin of the Waves ecosystem that promises to maintain a 1:1 ratio with the US dollar.

Once bitten, twice shyThe $60 billion worth Terra and Luna crashes in May still haunt crypto markets. Another de-peg event resulted in panic, because of the uncanny similarities between Terra-Luna and Neutrino USD-Waves.

Just like Terra and Luna followed each other’s price movements, Neutrino USD is backed by the Waves token. However, Waves founder Sasha Ivanov has claimed that Neutrino USD is different from Terra since their protocol has limits on redemptions.

Not the first timeThis is the third time in 2022 that Neutrino USD has faced a de-peg. It got de-pegged in April, May, and June. Ivanov cried foul play but has not ruled out volatility.

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