Should I buy Ripple? WSB sends XRP 90% higher

Should I buy Ripple? WSB sends XRP 90% higher

Ripple (XRP) price is trading over 40% higher at the moment after it initially exploded 90% to tit a 5-week high.

Fundamental analysis: Ripple responds to SEC lawsuit

In December, the US Security and Exchange Commission (SEC) filed a lawsuit against Ripple over the alleged violation of federal securities laws in selling the XRP cryptocurrency to retail consumers.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

“Over a years-long unregistered offering of securities (the ‘Offering’), Ripple was able to raise at least $1.38 billion by selling XRP without providing the type of financial and managerial information typically provided in registration statements and subsequent periodic and current filings,” the filing said. “Ripple used this money to fund its operations without disclosing how it was doing so, or the full extent of its payments to others to assist in its efforts to develop a ‘use’ for XRP and maintain XRP secondary trading markets.”

A month later, Ripple hits back. The company sent a preliminary response to SEC asking the regulator to explain how is XRP not security, while BTC and ETH are?

“We’re just asking for the rules to be stated clearly and for those rules to be applied consistently across the board. We sent a FOIA request to the SEC asking for more information about how the determination was made, in hopes of gaining more clarity on how they came to the initial conclusion about ETH,” it is said in the statement.

It adds that the SEC complaint is “full of cherry-picked quotes taken out of context,” as the company seeks more information.

Technical analysis: WSB at work?

Given that Ripple’s statement came out yesterday and yielded a mini-rally in the XRP, it is likely that today’s explosive move in XRP is a product of WSB investors going back to work. As a group of investors that is fighting the establishment, they may have picked the XRP as Ripple is fighting the SEC in courts.

XRP/USD daily chart (TradingView)

In any case, the XRP price soared about 90% today to hit $0.5157, which is the highest price traded in the past 5 weeks. The price action has pulled back in the most recent hours on profit-taking activity. Any daily close above $0.37 will be seen as an opportunity to buy Ripple as the old resistance becomes support.

Summary

Ripple price is trading over 40% higher at the moment after it soared about 90% on WSB support.

Ripple Responds to SEC Lawsuit Over XRP Sales

InvestorPlace

You probably think of Sundial Growers (NASDAQ:SNDL) as a marijuana play. After all, it’s one of the larger publicly listed cannabis companies out there. In the past, SNDL stock has tended to trade in line with its marijuana peers. Now, however, things have changed. Source: Shutterstock At least for the time being, Sundial is no longer a traditional cannabis stock. Instead, it’s a Robinhood play. Right now, Sundial’s fate is closely tied to the trendy new brokerage firm. And with a momentous act on Thursday, Robinhood threw Sundial — and other such stocks — into uncertainty. This is a fluid situation, but here’s what we know as of this writing.InvestorPlace - Stock Market News, Stock Advice & Trading Tips SNDL Stock and the Massive Short Squeeze In recent days, stocks of certain businesses with poor fundamentals and large operating losses have positively exploded. We’re talking about the likes of Gamestop (NYSE:GME), AMC (NYSE:AMC) and so on. These were moves in thousands of percent in some cases. But why are these moves happening? Short squeezes. The folks over at Wall Street Bets on Reddit — as well as other online trading communities — deduced that they could drive up the value of certain businesses with low share prices and bad fundamentals. They also found that they could pull this off by simply engaging in the relentless buying of these securities, powered by the meme magic of social media. With enough continuous buying, short sellers were soon eviscerated. That even led to the collapse of major firms, like Melvin Capital. Of course, SNDL stock hasn’t blasted off like Gamestop, for instance. However, it has enjoyed similar interest from certain online trading groups — and now it’s subject to the consequences. Robinhood Cracks Down Many of these social-media-powered traders like using Robinhood because of its mobile app and ease-of-use. As a result, many of those traders plowing into Gamestop, AMC, Sundial and the like were buying these stocks on the platform. Evidently, though, Robinhood grew increasingly alarmed about those unprecedented levels of speculation. Because of that, the firm decided to try to chill the waters a bit. On Thursday, Robinhood announced that it was restricting trading of particularly volatile securities until the current mayhem dies down. Its press release including the following: “We continuously monitor the markets and make changes where necessary. In light of recent volatility, we restricted transactions for certain securities to position closing only. You can see the latest here. We also raised margin requirements for certain securities.” Closing positions only, to be clear, means that traders can only sell their existing positions in the particular stocks noted by the platform — GameStop, AMC, BlackBerry and Sundial, among others. So, with that move, Robinhood stopped its users from buying additional shares in those listed stocks, including SNDL stock. The effect was immediate and dramatic — GME, for example, saw its stock plummet in a couple of hours following Robinhood’s move. What’s the Impact on Sundial? SNDL stock had been up from the 60 cent range to more than a dollar on Thursday morning. It then dropped back to 82 cents for the close, following the Robinhood ban. However, Sundial didn’t completely implode like some of the other targeted securities. That’s probably because Sundial had never gone up nearly as far in the first place. As I’ve previously discussed, it seems like Sundial was drawing interest because it was one of the marijuana stocks with the cheapest share prices out there. For awhile, the stock was under 50 cents. To unexperienced traders, a stock at 50 cents may seem a lot more appealing than one trading at $10 or $20 per share. That’s a factor of people not really understanding the difference between market capitalization and share price. Nonetheless, the effect is real and Sundial enjoyed powerful retail trading interest in recent weeks. That has made Sundial a fantastic day-trading name, but much less attractive as an investment. The Verdict SNDL stock will struggle to go on another sustained rally as long as Robinhood and other brokers restrict buying. What’s more, Sundial’s operating business metrics simply aren’t that great. Investors looking to buy the best marijuana company based on revenue growth or a profits basis are unlikely to pick this company. Therefore, the outlook for Sundial is highly dependent on what happens with Robinhood. There has been huge backlash against the firm for its decision to block buying of certain stocks — Congresswoman Alexandria Ocasio-Cortez and Barstool Sports founder Dave Portnoy are among those leveling withering criticism against it for the decision. Robinhood did say on Thursday evening that it would allow “limited buys” of the blacklisted stocks going forward, but it’s unclear how strict those limits will be. To be fair to Robinhood, though, it isn’t the only brokerage firm that has cracked down on these sorts of stocks. For instance, Interactive Brokers (NASDAQ:IBKR) also limited trading of certain volatile securities and jacked up margin rates on others to try and tamp down the volatility. The U.S. Securities and Exchange Commission (SEC) is also reportedly investigating the unusual trading in these stocks as well. All that is to say that it’s a perplexing situation for SNDL stock owners. I’d steer clear of this name, simply because the underlying business is troubled. Basically, it’s a roll of the dice regardless. But, that said, pay attention to the upcoming developments with brokerages closely. Obviously — as long as places like Robinhood are limiting folks from buying SNDL — its share price will face a massive headwind moving forward. On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks. Read More: Penny Stocks –How to Profit Without Getting Scammed On the date of publication, Ian Bezek did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next 1,000% Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. The post Robinhood Limits Trading for SNDL Stock: What You Need to Know appeared first on InvestorPlace.

Revolut warns that cryptocurrency XRP could become worthless

Revolut has warned customers that XRP, formerly the third-biggest cryptocurrency by market value, could become worthless.

The warning comes two weeks after the US Securities and Exchange Commission (SEC) charged associated blockchain firm Ripple with conducting a $1.3 billion (€1.06 billion) unregistered securities offering.

The value of XRP has tumbled in recent weeks on the announcement. The cryptocurrency, which often moves in tandem with bitcoin, had rocketed in November to hit its highest level since 2018, as a rally in cryptocurrencies gathered pace. However, it has since lost more than half its value, while bitcoin on Sunday hit a new all-time high above $34,600 on the same day the flagship cryptocurrency marked the 12th anniversary of its creation.

XRP was trading at $0.25 on Tuesday, down from a close of $0.55 the day before the Ripple charge was announced.

In a note sent to customers, Revolut warned that although it was still possible buy and sell XRP on its platform, some exchanges had started to delist the cryptocurrency.

It said the price of XRP was volatile and that if one of its partner exchanges were to decide to delist the currency, it might have to follow suit.

“We might also have to halt trading with very little notice if the liquidity on our partner exchanges drops and we can no longer buy or sell XRP. This would mean you might not be able to sell your XRP balance and could be stuck with a holding for which the price could drop to zero, in a worst-case scenario,” Revolut said.

Advance notice

The fintech does not currently offer a service to allow users to withdraw their XRP balance to an external wallet. It said that although it would try to give advance notice if it had to suspend the buying and selling of the currency, it might not be able to do so.

“It’s important that you constantly reassess your crypto holdings, specifically XRP, and whether you remain comfortable with the associated risks,” Revolut said. “In particular, it’s a good idea to regularly check your buy and sell orders – including any recurring buys and auto-exchanges that you may have set up – to make sure you are still as happy with them as the time when you set them up.”

The company, which has one million customers in the Republic of Ireland, said it would continue to monitor the situation with Ripple and the responses taken by its partner exchanges.

Revolut users held some $120 million worth of cryptocurrencies in 2019, up 152 per cent on the previous year. The company first started selling access to cryptocurrencies in 2017 with support for bitcoin, either and litecoin.