While waiting for the SEC lawsuit to come to a conclusion, there has been some interesting news coming out lately about Ripple and XRP.
First of all, after mid-September, the market price of XRP rose 71%, and although it then fell a little now it is still 41% higher than it was on 16 September.
After the May crash, it hit a low in mid-June at about $0.30, and until 16 September it remained below $0.35. Then it surged sharply, so much so that it reached over $0.55 on 23 September, which was only a week later.
In such cases, a reversal often occurs after a large and rapid rise, but in the case of XRP this time the reversal was not particularly large. Indeed, today the price is still above $0.45, which is significantly higher than it was in mid-September, although lower than the $0.60 of early May.
While this increase was due precisely to the good news coming out of the SEC’s lawsuit against Ripple, other news came out later that may have helped keep the price level above $0.45.
Summary
Smart contracts on Ripple
The main news in recent days is that a sidechain compatible with the Ethereum Virtual Machine (EVM) has been created on XRP Ledger.
🥁Introducing the first phase of bringing an Ethereum Virtual Machine (EVM) sidechain to the #XRPLedger.
EVM developers, we invite you to experiment with the functionality on Devnet and enjoy the best of Ethereum and XRPL for your #DeFi applications. https://t.co/gdBG8d5Xvl
— RippleX (@RippleXDev) October 17, 2022
This news about XRP could prove to be particularly important because there are far fewer active and widely used smart contracts on its Ledger than on Ethereum.
In theory, however, XRP Ledger allows for faster and cheaper transactions, so the RippleX team is trying to convince as many Ethereum developers as possible to move their smart contracts there.
While the EVM-compatible sidechain in theory could help such a migration, it does not seem very likely that a significant number of smart contracts will be moved from Ethereum to XRP.
In fact, XRP has a limitation: it is less decentralized than Ethereum. Many of those who choose Ethereum to run their smart contracts rely precisely on its immutability and predictability, so as to minimize risks from disruption or significant changes to the underlying infrastructure.
Although many proponents of XRP claim that it is a decentralized blockchain, it is quite unlikely that developers on Ethereum will be convinced.
Ripple and XRP: the latest news on the market
It is important not to forget that of the nearly 100 billion XRP tokens in existence, more than half are still owned by Ripple, which is a private company complete with shareholders and a CEO.
Despite the fact that the company has not put many of its XRP tokens on the market in recent years, this still does not guarantee that it will not do so in the future. It also shows that Ripple’s power over XRP is still definitely high, if only at a potential level.
To be fair, even about Ethereum there are critics who argue that it is not a fully decentralized platform, but it seems at least far-fetched to say that it is not more decentralized than XRP.
Moreover, since there is always some sort of fully centralized entity hovering over XRP, which is the company Ripple, it is very difficult to imagine that Ethereum users would really appreciate a shift to XRP.
In the past, there have already been several other alternative projects to Ethereum that have tried to snatch users and developers away from it with similar initiatives, but although there are now many EVM-compatible blockchains, Ethereum remains the undisputed leader among smart contract platforms.
However, if in the future XRP Ledger were to become so decentralized that it could be equated with Ethereum in this respect, perhaps some smart contracts may migrate now that it has an EVM-compatible sidechain.
The EVM-compatible sidechain
The new sidechain was developed by Peersyst, which launched the first phase a few days ago.
A bridge between the sidechain and XRP Ledger Devnet is also planned in this first phase.
While the primary goal would seem to be precisely to migrate Solidity-based smart contracts to XRP Ledger, there are also two much more realistic secondary goals.
The first is to effectively allow Solidity to also be used to create smart contracts for XRP. Solidity is by far the most widely used programming language for smart contracts, so this could be a great benefit to the XRP ecosystem.
On the one hand, it trivially allows those already developing in Solidity to be able to develop for XRP as well, and on the other hand, it allows those who want to develop for XRP to use a language that can be used on other blockchains as well.
The second benefit, probably even greater, is that now those already developing smart contracts for Ethereum can also publish them on XRP Ledger. This, for example, makes it possible to create cross-chain bridges much more easily and immediately.
So even if few smart contracts migrate from Ethereum to XRP, XRP’s new EVM-compatible sidechain in theory could still be successful.
Ripple’s (XRP) price forecast, influenced by the latest news
It should come as no surprise, therefore, that some optimistic predictions regarding the price of XRP have come out lately.
The current news regarding Ripple and XRP does not seem sufficient to trigger a major increase in buying pressure in the markets, but this could change in the coming weeks and months.
In particular, should the impasse of the SEC’s lawsuit against Ripple really break the deadlock, a lot of volatility could be generated in the markets. For example, on 17 September all it took was an assumed shortening of the timeline to generate a +71% increase in the price of XRP in just one week.
According to some analysts, for this very reason, XRP could have interesting potential, although nothing is certain. Indeed, should the expected turnaround in the SEC lawsuit prove negative soon, the consequences could be decidedly negative. Nonetheless, some optimism has been circulating for some time in this regard, although it is not known how much can be justified.
It is worth noting that when the news came out that the SEC had sued Ripple in late 2020, the price of XRP dropped to $0.22, which is a level less than half of what it is today.
The fact is that in recent weeks, XRP’s Relative Strength Index (RSI) has fallen below the overbought level it had at the end of September, so it may be poised for another rise. However, it should be stressed that any optimism regarding XRP has to do only with market sentiment, and not with fundamentals or macro conditions.
According to a recent survey of 55 industry specialists, should Ripple win over the SEC, the price of XRP could rise to $3.8 by the end of 2025. This would be higher than even the all-time high of $3.4 touched in January 2018.
This prediction may seem far-fetched, but it should not be forgotten that during the 2021 bullrun XRP, unlike the other top 10, did not record new highs.
Since the main reason for XRP’s failure to set new all-time highs in 2021 could probably be specifically the SEC lawsuit, in the event of a positive outcome its price could unlock.
Another anomaly was that the 2021 peak was reached by XRP in April, and not in November like Bitcoin and Ethereum. So its behavior differs somewhat from that of the other major cryptocurrencies, and right now it is so affected by the ongoing lawsuit that in its absence it could completely change its market performance.
