XRP News Today: XRP Holds Gains as Legal Risks Loom Over Spot ETF Ambitions; BTC Dips

Ripple vs. SEC: Legal Clarity on XRP Looms as Court Ruling Nears

The SEC faced intense scrutiny on Tuesday, May 27, as investors awaited a court filing in the ongoing Ripple case. SEC Commissioner Hester Peirce was in the spotlight after delivering her May 19 ‘New Paradigm’ speech.

Ripple Chief Legal Officer Stuart Alderoty shared a letter addressed to the SEC’s Crypto Task Force, stating:

“Today, Ripple submitted an additional letter to the SEC’s Crypto Task Force addressing a key question from Commissioner Peirce’s ‘New Paradigm’ speech: When does a digital asset separate from an investment contract?”

The letter referred to Judge Torres’ summary and final judgments in the Ripple case, noting:

“In that decision, the court held that certain of Ripple’s historical institutional sales of XRP were investment contracts, but others of Ripple’s transactions involving XRP, including Ripple’s secondary market sales (e.g., blind bid/ask transactions), did not constitute investment contracts.”

The letter also highlighted that Judge Torres determined that XRP itself is not a security.

However, Ripple also argued that Congress should address any legal gap, not the SEC, to ‘fill it’, while offering interim solutions to whether an asset is sold as part of an investment contract, the third prong of the Howey test.

SEC vs. Ripple Case: Is the SEC Changing its Stance on the Appeal?

The SEC’s stance on crypto and investment contracts is crucial for XRP. On May 15, Judge Torres rejected an SEC request for an indicative ruling on lifting the injunction prohibiting XRP sales to institutional investors and lowering the $125 million penalty.

A final judgment settlement is pivotal for the SEC to withdraw its appeal against the Programmatic Sales of XRP ruling. In 2023, Judge Analisa Torres deemed that programmatic sales of XRP did not satisfy the third prong of the Howey Test.

If the courts reject the request for an indicative ruling for a second time, the SEC may pursue its appeal. Successfully overturning the Programmatic Sales ruling may lead to exchanges delisting XRP to avoid SEC oversight, impacting XRP adoption.

While Ripple would likely challenge a reversal, legal uncertainty may materially impact XRP demand and the chances of XRP-spot ETF approvals.

XRP Price Outlook: Legal Risks in Focus

XRP gained 0.3% on Tuesday, May 27, partially reversing Monday’s 1.37% loss to close at $2.3174. The token tracked the broader market, which rose 0.22%, taking the total crypto market cap to $3.39 trillion.

XRP’s near-term trajectory depends on court decisions and XRP-spot ETF-related updates.

Technical support remains at $2.26. A break above the May 12 high of $2.6553 could support a move toward $3.00, with the potential to reach its record high of $3.5505.

For a deeper dive, see our full XRP forecast here.

Bitcoin Dips as ETF Inflows Slow Ahead of Fed Minutes

While XRP advanced, institutional demand for Bitcoin (BTC) slowed on May 27. According to Farside Investors, net flows included:

• ARK 21Shares Bitcoin ETF (ARKB) reported net outflows of $38.3 million.
• Grayscale Bitcoin Trust (GBTC) saw net outflows of $26.9 million.
• Grayscale Bitcoin Mini Trust (BTC) had net inflows of $36 million.

Excluding data from BlackRock’s (BLK) pending iShares Bitcoin Trust (IBIT), the US BTC-spot ETF market saw total outflows of $23.9 million, potentially ending an eight-day inflow streak.

Despite BTC’s modest loss and potential ETF outflows, sentiment remains upbeat, supported by the May 22 all-time high of $111,917.

Market intelligence platform Santiment commented:

“Are traders showing a high level of FOMO as Bitcoin’s market value ranges around the $110K level? A bit, but the euphoria has calmed down a bit. And with markets moving the opposite direction of retailers’ expectations, we want to continue to see some reasonable doubt.”

Santiment considers bullish and bearish commentary trends as key to BTC’s price outlook, stating:

“Over the past week, we have highlighted 3 spots where there is a dangerous level of euphoria, and 3 spots where traders were overly fearful. Look for spots where bearish commentary is outweighing the bullish, as they continue to present great spots for opening & adding on to your positions.”

BTC Price Outlook: The Fed, Legislation, and ETF Trends

BTC fell 0.46% on May 27, reversing Monday’s 0.33% gain to close at $108,952. Notably, BTC ended its three-day winning streak.

The near-term price outlook hinges on the FOMC meeting minutes, legislative-related news, trade developments, and ETF inflows.

Potential scenarios:

• Bearish Scenario: Rising trade tensions, legislation roadblocks, a hawkish Fed, and ETF outflows could drag BTC below $100,000.
• Bullish Scenario: Easing trade tensions, Bitcoin Act progress, a dovish Fed stance, and ETF inflows could drive BTC above the record high of $111,917 to target $115,000.

What to Watch

Investors should track legal developments in the Ripple case, legislation-related news from Washington, and Fed signals. These factors will likely steer broader market sentiment and determine whether XRP and BTC can revisit recent highs.

Explore analyst forecasts on where XRP and BTC may head next amid legal and political tailwinds.