Will SEC Suit over XRP affect Crypto Investments in 2021?

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Trust and uncertainty are opposite sides of the same coin. Each of them is a market mover. With cryptocurrency, the trust factor has been hard-earned over several years of uncertainty, culminating in a boom year in 2020 for Bitcoin, Ethereum, and others.

On January 19th, Coinbase will suspend all trading of XRP, a cryptocurrency offered by Ripple Labs, due to an SEC lawsuit against the company claiming the token is a security and should be marketed as such. Ripple has been offering XRP for seven years.

In an interesting sidenote to this situation, Thomas C. Sandoval, a California investor, is now suing Coinbase for knowingly selling XRP as an unregistered security and making commissions on those sales. His attorneys are seeking class action status for the lawsuit.

The “Ripple” Effect on the Crypto Market

The value of XRP is directly pinned to the success or failure of Ripple Labs, so technically I can see why the SEC views it as a security. Ripple has raised $1.3 billion with the token. Of course, the powers that be are looking to grab their “fair share” of that.

My question, after seeing this story last week, is whether or not it will affect the surge in cryptocurrency trading and the value of Bitcoin (BTC) and Ethereum (ETH) in 2021. There are other crypto tokens on the market, but those are my Q1 best bets for profitability.

Ripple was trading at $0.18 on December 29th. It opened at $0.34 this morning. Bitcoin went from $28,424 to $39,261 in that same time period. Ethereum is up 70% in seven days. I am having a very happy new year so far. Will it last? I believe so.

The price increase on XRP shouldn’t surprise anyone with experience in crypto investing. Removing the token from Coinbase makes it more valuable in the eyes of investors in this sector. The SEC filing is viewed as a “big brother” action by the DeFi crowd.

Bitcoin will Create New Millionaires in 2021

In early 2020, Bitcoin was projected to hit $22K in 2021. It’s already at $39K. Ethereum was touted to hit $800. It’s at $1200. Both of these are currently overbought, but it doesn’t mean the rise won’t continue. You can wait for the crash or get in now and ride the wave.

I bought a large block of BTC early in December and I’m up 75% as of this morning. It’s looking like I’ll double my money by the end of the month. Where else can you do that? I could cash out today and buy my wife a new car. That’s the type of movement I got into trading for.

The Motley Fool keeps writing about how “dangerous” Bitcoin is as an investment. This morning they told me to buy Novavax (NVAX) instead. Seriously, guys? NVAX fell short on earnings projections twice in 2020 and is projected to be down 300% by May 2021.

Beware of stock promoters. They trash big movers to get the keyword traffic and then put you onto a dog so they can overinflate the price. Novavax isn’t going anywhere. If I wanted biotech in my portfolio, I’d buy Moderna (MRNA). They’re at $114 right now, priced to move.

Bitcoin will create new millionaires this year. It happened in 2020 and it will happen again. Don’t view it as a long-term investment just yet though. There’s still some volatility ahead, but the peaks will rise high above the valleys. I expect to see it at $50K by spring.

Etherium and Litecoin Could Benefit from XRP Suit

Altcoins are essentially any cryptocurrency that is not Bitcoin. Ethereum is the number one altcoin on the market. XRP is number two. Perhaps that’s why the SEC took aim at them? Sorry for dropping the conspiracy theory. You can discuss it amongst yourselves if you like.

Etherium is a software platform. Their token is called Ether, and its market cap is one tenth the size of Bitcoin’s. They’ve been around since 2015, so the company is fairly well-established for this particular market segment. They are not currently being sued by the SEC.

According to Yahoo Finance, Etherium hit $1223.77 this morning. They are projecting this altcoin to stay above $1000 due to a lower support band of $1004 and a high resistance band of $1265. That’s trader-speak for, “this is our best guess.”

My process looks a little different. As the Coinbase drop date of January 19th creeps closer, I expect XRP trading volume to decrease. That should benefit Etherium (ETH) and Litecoin (LTC), the #1 and #3 altcoins. I already own Etherium. I’m adding Litecoin today.

Why Litecoin? Common $ense tells me it is a solid long-term investment. It was created to facilitate shorter transaction times and eliminate network congestion often seen with Bitcoin. With BTC now on Paypal, a growing appetite for crypto should create a demand for Litecoin.

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About the Author

Will SEC Suit over XRP affect Crypto Investments in 2021?

Kevin Flynn

Kevin D. Flynn is a former financial professional and founder of AdvisorScale Financial Writing. He lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.