Ripple’s team has reiterated that its native cryptocurrency XRP is not a security and does not fall under the regulatory scope of the Securities and Exchange Commission (SEC).
The company has argued that the XRP is similar to Bitcoin (BTC) and Ethereum (ETH), and as such should fall under the Commodity for Future Trading Commission (CFTC) oversight.
According to a recent report from JPMorgan published by Finance Feed, Ripple XRP price growth correlates with that of BTC despite the growing popularity of the former in the traditional financial industry.
Over the years, Ripple has partnered with various financial institutions, building relevant infrastructure to facilitate cross-border settlements.
Michael Cimbalest, Chairman of Market and Investment Strategy at JP Morgan Asset Management, noted that between 2019 and 2020, Ripple reported a five-fold growth in remittance transactions.
Ripple is considered a settlement network capable of completing 1,500 transactions per second (TPS) while Bitcoin and Ethereum are capable of 7 and 15 TPS, respectively.
XRP Price Correlates With BTC
However, these developments have not fostered the growth of the XRP coin despite the widespread adoption of RippleNet in transactions.
Cimbalest argued that XRP price only moves alongside that of BTC. With bitcoin recovering from the previous bearish weeks that saw the cryptocurrency fall below $33,000, XRP was also affected, trading around $0.57, at the time.
Interestingly, following the market recovery, BTC value soared to nearly $43,000 in the early hours of today, while XRP spiked to $0.77.
JPMorgan argued XRP’s growth may seem tied to Bitcoin because financial institutions are only adopting the network for settlement and not the cryptocurrency.
SEC Lawsuit Slows Down XRP Institutional Adoption
The adoption of XRP by corporate investors has been on a low as the world continues to observe the outcome of the SEC lawsuit against Ripple.
The case, which is expected to come to an end next year, has been a thorn in the flesh of the XRP community since the end of 2020.
Recent reports suggest that the SEC will present two exhibits, exhibit 179-4 and 179-5, to Judge Analisa Torres, which supports its claim that Ripple sold unregistered securities within its shores.
Exhibit 179-4 shows Ripple CEO Brad Garlinhouse’s conversation with the company’s employees stating XRP holders’ expectation of the price of the coin.
Similarly, the other evidence, Exhibit 179-5 shows Chris Larsen’s email with an XRP investor discussing the price dynamics of the cryptocurrency.
However, many experts consider both exhibits weak, as they believe the SEC will require better documents to back up these claims.
Interestingly, the outcome of the lawsuit is expected to set a standard in the cryptosphere about which cryptocurrency should be classed as a security.