Elon Musks mention of the token leads to a 1 billion increase in XRP value

Billionaire Elon Musk made headlines once again on Sunday, October 20, as he hosted a town hall meeting in Pittsburgh, Pennsylvania in support of Republican presidential candidate Donald Trump. This event not only showcased Musk’s ability to attract publicity but also had a significant impact on the financial markets, specifically the crypto markets. Unlike previous instances where Musk talked about his preferred digital assets like Bitcoin, Dogecoin, and Ethereum, he mentioned XRP for the first time in a public setting.

This mention of XRP by Musk, which he clarified was neither an endorsement nor a lack of endorsement, led to a noticeable increase in both XRP activity and price. XRP has been involved in a legal battle between the SEC and Ripple Labs, with the SEC appealing an initial ruling in favor of Ripple Labs on October 17. This appeal revolves around the question of whether or not XRP is a security. Due to the uncertainty surrounding this legal proceeding, XRP has experienced relatively stagnant prices, with a 9% decline year-to-date.

However, Musk’s mention of XRP caused a rapid 3.44% gain in price on the daily chart. During the Q&A section of the event, an attendee asked Musk about the potential adoption of the XRP Ledger by financial institutions, considering opposition from the SEC’s current head, Gary Gensler. Musk responded by stating that cryptocurrency, in general, serves as an interesting and valuable defense against centralized control. He made it clear that his statement was not an endorsement or lack of endorsement for XRP.

Despite Musk’s ambiguous answer, the markets interpreted it as a strong, indirect endorsement. Alongside the price surge, XRP’s market capitalization increased from $30.6 billion to $31.6 billion within 24 hours. It remains to be seen if Musk’s mention will lead to a significant rally, but several factors suggest that XRP will continue to trade sideways for some time. Experts predict that prices could reach as high as $2 by 2025, but the recent influx of 1.2 billion XRP into circulation and the outcome of the SEC’s appeal will likely prevent strong upward movements in the short term.

While Ripple aims to attract financial institutions with its new crypto custody storage, the result of the SEC appeal will ultimately determine XRP’s long-term price action. It’s worth noting that the initial ruling was in favor of Ripple Labs, and a similar outcome could occur again. Additionally, a breakout for XRP could be catalyzed by a potential victory for Trump in the November elections.