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In a recent interview with the Paul Barron Network, Bitwise Chief Investment Officer (CIO) Matt Hougan shared his insights on the ongoing regulatory battle involving XRP and the potential market impact once legal uncertainties are resolved. According to Hougan, the cryptocurrency XRP, which has been constrained by litigation for an extended period, could be significantly undervalued and may experience a substantial market correction once its legal issues are resolved.
Since 2020, XRP has been embroiled in a legal dispute with the US Securities and Exchange Commission (SEC), accusing Ripple Labs of conducting an unregistered securities offering. This lawsuit has cast a shadow over XRP, impacting its growth in the US market and leading to its delisting from several major exchanges.
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As the lawsuit approaches a potential resolution by April 16, market participants are speculating on XRP’s future trajectory. Hougan suggested that a favorable outcome could unlock significant demand for XRP and change the narrative surrounding the cryptocurrency.
Discussing the post-lawsuit scenario for XRP, Hougan highlighted the cryptocurrency’s untapped potential in the broader crypto landscape. Unlike Bitcoin and Ethereum, which have seen substantial adoption and institutional interest, XRP has remained stagnant due to regulatory uncertainties. If the legal issues are resolved, XRP could realize its full potential in global finance.
While Hougan refrained from making specific price predictions, he emphasized that renewed regulatory clarity in the US could swiftly pivot institutional and retail sentiment towards XRP.
Japan’s Role in XRP Adoption
The conversation also touched on Japan’s significant adoption of XRP, with SBI Holdings leading the way in integrating the cryptocurrency into its digital banking ecosystem. XRP has surpassed Ethereum in terms of investor holdings in Japan, indicating strong institutional confidence in its future.
Hougan noted that XRP’s utility in international remittances and liquidity solutions is often overlooked, and the ongoing legal battle has hindered a comprehensive evaluation of its demand driven by utility.
Another point of discussion was the potential for a spot XRP exchange-traded fund (ETF). While Hougan did not disclose details about Bitwise’s ETF filing progress with the SEC, he expressed confidence in the firm’s strategic approach to ETFs.
While some analysts believe that XRP’s legal challenges are already factored into its price, Hougan believes that the broader market has largely ignored the cryptocurrency’s upside potential. A favorable resolution to the SEC case could lead to XRP relisting on major US exchanges, increased institutional interest, and expanded adoption in banking systems, potentially triggering a market repricing event.
At the time of writing, XRP is trading at $2.12.
Featured image from YouTube, chart from TradingView.com