Crypto Briefing 10/21/22 – The Forecast

Crypto Briefing 10/21/22

Crypto Briefing 10/21/22

Bitcoin is one bad day away from calamity. With BTC sitting at a critical support level, we could be at the precipice of a major crash in the crypto market. Should this break occur, we will have a brief fire sale in all of our favorite altcoins. With sell pressure in stocks coming over the next few trading days, we favor this break happening soon.

While we cannot speak for individual coins, the crypto market will be affected by recession and stock market prices over the next few years. In the past, we have talked about how staking cryptocurrencies is a terrific way to compound coins and earn an APY similar to the S&P500 but with minimal risk.  Especially in a difficult environment, staking is a great way to lock in interest and income if you plan on holding any one coin for an extended period of time. Starting on October 22nd, investors will be able to earn interest by staking HBAR. Additional staking projects like Algorand, Casper, Cosmos, and FTT also offer competitive APY’s.

The Ripple-SEC Lawsuit is looking closer and closer to a resolution. After being ordered by a federal judge, the SEC sent Ripple’s legal council a copy of internal memos revolving around a speech given by Bill Hinman. Hinman worked as the Corporation Finance Director of the SEC, and throughout his infamous speech, Hinman affirmed that cryptocurrencies such as Bitcoin and Ethereum were not securities. In its startup phase, Ethereum was the beneficiary of large amounts of outside capital from VC firms and crowdfunding campaigns.

Unlike Ethereum, XRP was created before the company Ripple was founded. Additionally, the creators of the XRP ledger never raised outside capital when they were developing the blockchain. The conclusion we draw from the Hinman Speech is that the SEC set a precedent when they declared Ethereum as a commodity, rather than a security. Following this line of thinking, the question becomes why the Securities and Exchange Commission decided to go after Ripple and XRP.

The best-case scenario for XRP in terms of its price is if we see a settlement between Ripple and the SEC before the end of the year. While in a bull market it was possible for us to see XRP reach $7 to $15, there is a substantially smaller amount of volume in crypto. Right now if XRP reached $7 dollars, it would have a market capitalization surpassing Bitcoin. Even though we do not believe Bitcoin will be the number one cryptocurrency forever, we do not expect XRP to be the first to beat it out. We feel that the most effective exit strategy for XRP is scattering out sell points from $1 to $5, or holding if you are a long-term believer in Ripple and the team’s vision.