PLUS: Ripple’s partial victory last week in its ongoing legal feud with the Securities and Exchange Commission left important questions unsettled for token issuers, a crypto lawyer told CoinDesk TV.
Good morning. Here’s what’s happening:
Prices: XRP, XLM have a day in the spotlight. Bitcoin loses $30K.
Insights: Ripple’s partial victory left key questions unsettled. Preston Byrne told CoinDesk TV that lawmakers need to create a “legal regime” that accounts for digital assets’ unique characteristics.
XLM, XRP Lead Altcoin Rally
XLM and XRP led a posse of altcoins out of a price quagmire of the past five days, rising by double-digits and outperforming still-sluggish bitcoin and ether on Wednesday.
Blockchain-based payment platform Stellar Lumens’ XLM was recently trading above 15 cents, up 18% over the past 24 hours. The token last hit those lofty heights a week ago when it doubled in price, part of a crypto market surge that followed Ripple’s partial victory in a long-running legal feud with the Securities and Exchange Commission, before sinking in the ensuing days. At the start of the week, XLM was trading just above 13 cents.
Ripple’s XRP, the third largest crypto by market capitalization, was recently changing hands above 82 cents, up 6.8% from Tuesday, same time. XRP has held most of its gains since last Thursday. The CoinDesk Market Index, a measure of crypto markets performance, was recently trading up 0.5%
Markus Levin, co-founder of XYO Network, attributed XRP’s Wednesday spike to continued excitement about last week’s U.S. federal court decision, which established that XRP token sales on exchanges and through algorithms did not constitute investment contracts. The ruling has spurred a number of exchanges such as Coinbase, Kraken and Bitstamp to relist XRP, leading to a jump in investments, trading volumes and open interest for futures contracts.
“In short, we’re seeing a return of investors that had previously been spooked by recent regulatory measures,” Levin wrote in an email to CoinDesk.
ADA and SOL, the native cryptos of smart contracts platforms Cardano and Solana, rose over 6% at certain points, far outstripping bitcoin and ether, which slogged through another dispiriting day of little price movement. Bitcoin was recently trading at $28,877, roughly flat over the previous day. Ether had edged down the better part of a percentage point to trade just below $1,900.
Equity markets inched upward for a third consecutive day as investors continued their embrace of encouraging second quarter earnings by major financial services firms even after a 58% plunge in Goldman Sachs profits. The S&P 500 closed up 0.2%.
In an email to CoinDesk, Lex Sokolin, managing Partner of Web3 investment fund Generative Ventures, wrote that markets’ lethargy in recent days reflects their cyclical nature. There’s often “run-ups in anticipation and in response to news, and then a sell-off once the positive news has been incorporated into the price,” Sokolin wrote. Crypto is full of momentum and narrative traders, and this pattern persists — “the market animal spirits.”
Noting multiple market friendly events in recent weeks, including the XRP decision, an improving macroeconomic landscape and BlackRock spot bitcoin ETF filing, he added: “Actually what matters is just the possibility of support.”
