By Gaurav S. Iyer, IFC Published : March 26, 2018
Ripple News Update
Although investors hope to see XRP flourish in the United States, there’s reason to believe that Ripple’s main tailwind will blow from the East.
Just look at today’s leading Ripple news.
In the U.S., you have:
- The Internal Revenue Service (IRS) threatening cryptocurrency investors. The IRS published a reminder for investors, urging them to report gains made on cryptocurrency investments. The profits will be taxed as capital gains. Anyone who fails to fulfill these regulatory requirements could be subject to a $250,000 fine and five years in prison. (Source: “IRS reminds taxpayers to report virtual currency transactions,” IRS, March 23, 2018.)
- Potential sanctions on crypto transactions. The Treasury’s Office of Foreign Asset Control (OFAC) has a blacklist of people and institutions that U.S. financial firms cannot do business with. Terrorists, for example. The agency is now thinking about extending those rules to cryptocurrencies. (Source: “Questions on Virtual Currency,” U.S. Department of the Treasury, last accessed March 26, 2018.)
Meanwhile, in East Asia, you have:
- Yahoo! Japan launching a cryptocurrency exchange. Put another way, a Japanese tech giant is jumping feet first into cryptocurrencies. This would be like Google (Alphabet Inc (NASDAQ:GOOG) or Facebook Inc (NASDAQ:FB) opening an exchange in North America. Clearly, it’s a sign that cryptos are becoming legitimized in Asian financial markets, but I think it’s even more important when contrasted with the U.S. ecosystem.
- South Korea’s retail support for cryptocurrencies. Investors in the tiny nation have successfully beaten back legislation that would ban cryptocurrencies. They’ve won the fight. Now it’s about details, which means that there’s no existential threat hanging over blockchain developers.
These are quick examples to highlight the contrasting trends in the East and the West, but there are plenty more. Singapore, for example, has the infrastructure to become a leading hub of blockchain development. And guess which company has an outpost in Singapore?
Ripple, of course.
Ripple takes a lot of trouble to cultivate relationships in the East. In fact, the firm’s chief cryptographer, David Schwartz, is currently on a tour of panels, workshops, and meetups in Asia. He is passing through Hong Kong, Japan, and South Korea.
Ripple prices continued to bleed on Monday morning, falling six percent overnight as regulatory uncertainty plagued investor decision-making.
However, what I’m trying to highlight in this post is that regulatory uncertainty is fragmented. The fog might lift in Japan and South Korea sooner than in the U.S., thus changing the narrative enough to free XRP prices from their current pessimism. Keep that in mind.
We remain cautiously optimistic on our $10.00 Ripple price prediction, though it’s possible we might have to extend our time horizon if external shocks continue to derail the XRP price.