Week in Review: XRP’s 115% Power Surge Leads Cryptocurrency Market Higher

XRP was the standout performer in the cryptocurrency world this week. The so-called banker’s cryptocurrency rebounded more than 115% after a Ripple Labs executive teased an upcoming product release that could streamline XRP adoption.

The broader cryptocurrency market followed XRP higher after the U.S. Securities and Exchange Commission (SEC) announced it would delay a ruling on a keenly awaited bitcoin exchange-traded fund (ETF).

In traditional markets, U.S. stocks resumed their record-setting gains as pro-growth optimism outweighed lingering fears of an all-out trade war with China.

XRP Leads Crypto Uptrend

XRP is coming off its best week since the bull market as investors rallied behind the anticipated launch of the first xRapid product.   Ripple’s Sagar Sarbhai told CNBC this week he’s “confident” that a new cryptocurrency product will be released “in the next month or so.”

The value of XRP rocketed 115% between Tuesday and Friday, reaching its highest level in three-and-a-half months. The broader cryptocurrency market gained $25 billion on Friday to reach $224.3 billion, the highest in over two weeks. Altcoins and tokens led the end-of-week surge, dragging bitcoin’s dominance rate all the way back down to 51.8%.

XRP does risk a pullback at some point in the foreseeable future as markets contend with overbought levels. Traders also routinely “buy the rumor and sell the fact,” which explains price declines that occur after an anticipated positive event has occurred.

SEC Weighs Bitcoin ETF Decision

Washington’s securities regulator has announced it will seek further comments on a highly touted bitcoin ETF, a sign that officials were still grappling with a proposed rule change that would make it easier for issuers to securitize cryptoassets. The ETF in question – the VanEck SolidX Bitcoin Trust – was initially filed on June 6.

In a notice published on Thursday, the SEC outlined 18 key issues that require more input from the public. In particular, regulators are weighing the assertion that physically-backed bitcoin is less susceptible to manipulation than other commodities available in exchange-traded products.

From the notice:

“The Commission is instituting proceedings to allow for additional analysis of the proposed rule change’s consistency with Section 6(b)(5) of the Act, which requires, among other things, that the rules of a national securities exchange be ‘designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade,’ and ‘to protect investors and the public interest’.”

U.S. Stocks at Record Highs

The Dow Jones Industrial Average and S&P 500 Index notched record highs this week, as investors shrugged off an escalating trade war between China and the United States. Gains were largely driven by a rebound in technology shares as well as optimism that the U.S. economy is on solid footing.

Labor market data confirmed that outlook on Thursday as initial jobless claims fell to nearly five-decade lows. Last week, the Department of Labor reported a stronger than expected jump in hourly wages, a sign that plentiful jobs and declining unemployment was leading to higher pay.

The U.S. economy is coming off its best quarter of growth since 2014. Unlike 2014, the Q2 upsurge didn’t follow a ‘polar vortex,’ which had temporarily disrupted economic activity four years ago. According to the Atlanta Federal Reserve, the economy is forecast to grow at an even faster rate in the third quarter. Current estimates peg Q3 growth at 4.4% year-over-year.

The Week Ahead

Is this the end of the dreaded crypto market downtrend? It’s too early to be sure but the latest rebound in XRP and bitcoin suggests that the bears have relinquished their grip on the market, at least in the short term. Stepping back, however, bitcoin remains in a protracted bear market that could continue for the foreseeable future. For investors, this means lateral moves and tighter trading ranges are to be expected.

Monetary policy is back on the agenda next week as the Federal Reserve meets in Washington. The Federal Open Market Committee (FOMC) is widely expected to raise interest rates on Wednesday and may signal for one additional hike this year. The FOMC policy statement will be accompanied by quarterly projections for GDP, unemployment and inflation, as well as the ‘dot-plot’ summary of interest rate expectations.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to Hacked.com and Contributor to CCN.com, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi