3 Reasons Why XRP Could Hit $1 in 2024
LUCKNOW (CoinChapter.com) — Ripple’s native token, XRP, has navigated turbulent waters in recent years, grappling with legal challenges and market volatility that have kept its price under pressure. However, the tide appears to be turning, and there are compelling signs that XRP might be on the brink of a significant comeback, potentially reaching the $1 mark in 2024.
1. The Ripple SEC Lawsuit Might End Soon
The ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) has greatly hindered XRP’s price growth. Filed in December 2020, the SEC alleged that XRP is an unregistered security, leading to uncertainty and volatility in the market.
However, recent statements from Ripple executives indicate a potential positive turn. CEO Brad Garlinghouse expressed optimism about concluding outstanding legal issues “very soon.”
Additionally, Chief Legal Officer Stuart Alderoty reiterated the court’s decision that XRP is not a security and will remain unchanged.
These statements from Ripple’s executives have already increased user activity on the XRP Ledger. Additionally, the rise in active addresses and new address creations reached their highest single-day level since March. This surge in activity could drive XRP’s price further if the case ends well.
2. Potential Capital Rotation Due to XRP’s Underperformance
XRP’s year-to-date returns have lagged behind other top-ranking cryptocurrencies, making it relatively underbought. In financial markets, such scenarios often lead to capital rotation, where investors shift funds from overperforming assets to underperforming ones in search of higher returns.
As other major cryptocurrencies approach overbought conditions, investors might start rotating their capital into XRP, recognizing its potential for a price rebound. This influx of investment could significantly boost XRP’s price.
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Historical trends in financial markets show that underbought assets with solid fundamentals and use cases, like XRP, often experience substantial price increases when market sentiment shifts.
3. Interest Rates Might Go Down
The macroeconomic environment, particularly interest rates, plays a crucial role in cryptocurrency valuations. Lower interest rates typically lead to increased investment in riskier assets like cryptocurrencies. The Federal Reserve’s current stance suggests a potential easing of interest rates in 2024.
Forecasts indicate the Fed may implement several rate cuts throughout 2024, potentially reducing the federal funds rate by 150 basis points. Morningstar predicts up to six rate cuts in 2024, significantly lowering borrowing costs and enhancing liquidity. Historically, lower interest rates have been associated with increased investment in cryptocurrencies as investors seek higher returns in a low-yield environment.
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This macroeconomic backdrop could provide favorable conditions for an XRP price increase, potentially driving it to $1.
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