- Ripple (XRP-USD) has been involved in a lawsuit with the United States Securities and Exchange Commission (SEC) since late 2020
- A court date later this week could provide a big catalyst for investors
- The XRP token has remained very volatile in recent days for these reasons, as well as general volatility in the crypto industry
The race has been pretty bumpy lately for the world’s sixth largest cryptocurrency by market capitalization, Ripple (XRP-USD). Indeed, the crypto has fluctuated wildly over the past week, reaching above 53 cents and below 35 cents.
Much of this volatility is related to the ongoing lawsuit between the SEC and XRP’s parent company, Ripple. Ripple executives participated in an investigation regarding alleged unregistered securities offerings. This lawsuit dates back to 2020.
However, as the saga continues and further proceedings take place, investors are rightly integrating more uncertainty into the valuation of this token. Last week, investors in the crypto XRP saw downward selling pressure caused by Friday’s testimony from Ripple regarding documents from former SEC official William Hinman. The SEC alleges that these documents are protected by solicitor-client privilege.
That brings us to May 18. This is the next date when the SEC will respond to Ripple’s comments on this matter. Much of the SEC’s case against Ripple hinges on these communications, which have sparked much speculation among investors.
Let’s see why this could be a big problem in the future.
Why May 18 is an Important Date for XRP Crypto
Ripple’s ongoing lawsuit with the SEC is just one of many factors that XRP investors are currently considering. Indeed, massive price volatility resulting from market-altering events is a major concern for most investors.
A series of macro factors that pushed high-risk assets higher are now reversing. Less cheap capital means less fictitious money for speculators. For this sector, it is a falling tide that lowers all the boats.
Given the size of XRP, which has a current market cap of over $20 billion, the swings we’ve seen this week represent billions of dollars of market cap being added or subtracted almost daily. Interestingly, XRP is just one of many cryptocurrencies that have seen outsized volatility lately.
That said, until the end of this ongoing lawsuit, I foresee more volatility on the horizon. As a result, XRP is not a token that currently fits my risk profile.
As of the date of publication, Chris MacDonald had (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.