XRP (XRP-USD) has seen an acute pullback, with the cross-border payments-focused token now trading 35% below its 52-week high. However, the retreat isn’t unusual across the cryptosphere, as most coins are tracking Bitcoin’s recent downward trajectory.
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Looking at XRP’s situation, investor Andri Fauzan Adziima says technical analysis “points to a short-term bearish sentiment,” although Adziima believes developments around the Ripple ecosystem mean its long-term prospects remain sound.
Similar to Bitcoin and other early cryptocurrencies, Ripple started out as a digital currency aimed at enabling faster global transactions with minimal fees. Over time, however, it has grown into a much larger and more influential ecosystem. It has launched stablecoin Ripple USD (RLUSD), with reserves held by BNY (The Bank of New York Mellon Corporation), expanded into spot brokerage through a $1.25 billion acquisition (Hidden Road), and is eyeing spot XRP ETFs, among other initiatives.
The spot ETFs, in particular, could prove to be a meaningful catalyst. On Tuesday, Franklin Templeton removed the delaying language from its ETF filing, indicating the launch could occur soon. Nate Geraci, president of ETF Store, also expressed optimism, noting he expects Spot XRP ETFs to be available within the next two weeks, with November 13 as a “tentative date.”
Meanwhile, Ripple recently secured a $500 million strategic investment in a round led by Fortress and Citadel Securities, placing a $40 billion valuation on the digital infrastructure firm for worldwide settlements. Other participants in the round include Pantera Capital, Galaxy Digital, Brevan Howard, and Marshall Wace. The company is also increasing the value of XRP through buybacks, having already purchased 25% of the tokens in circulation.
In addition, Ripple is venturing into the digital asset treasury (DAT) arena, a segment popularized by MicroStrategy’s Michael Saylor. According to Bloomberg, Ripple Labs is exploring a $1 billion SPAC deal to establish a publicly traded entity dedicated to acquiring XRP tokens. “If completed,” Adziima observes, “the raise will be the biggest one yet, for a DAT focused on XRP, and one of the biggest in the sector overall.”
So, with all this to play out, Adziima thinks the retreat could offer an opportunity for investors, although not one that is risk-free.
“With all the buzz around Ripple, XRP’s recent pullback could yet prove to be temporary,” the investor summed up. “However, the overall crypto market risk is still a significant factor in the equation, and therefore, cannot be ignored.”
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.