Morning Minute | Crypto Rallies After Ripple Wins Key XRP Judgment

GM!

Take a minute to catch up on the latest in the Web3 space with today's NFT market analysis, top movers, and upcoming mints.

TylerD's Market Summary

The coins soared on Thursday after Ripple won a key ruling against the SEC. Read on to find out what happened and who the major winners were.

👨‍⚖️ XRP Is Not A Security

Massive news came for the crypto industry yesterday after a summary judgment was issued in the SEC v. Ripple Labs case.

Ripple's XRP token was found not to be a security, an incredible ruling for a case that's been in the courts since December 2020.

The crypto market rampaged in the aftermath, with XRP surging 69% and several alts running 10-20%.

And the coins weren't the only major winner on the day.

What Happened?

The SEC v. Ripple case is based on the allegation that Ripple failed to register XRP as a security before its $1.38B token sale.

This case has become even more relevant in the past months after the SEC has charged Binance and Coinbase with securities-related actions.

Those SEC cases just took a major hit though.

Ripple's XRP token was found not to be a security in and of itself as a digital token, as it did not meet the requirements of the Howey Test.

This was only half of the case though; the other important aspect was whether Ripple's sales of XRP constituted securities sales.

The court ruled that only Ripple's institutional sales should be considered as a security sale, and all other sales including "programmatic distributions" and use of tokens to pay employees and 3rd parties were not considered as security sales.

In that ruling, the court is saying that the sale of XRP to investors satisfied the Howey Test requirements as those buyers had reasonable expectations to profit from the work that the Ripple team would do using the capital raised from the sale.

So that $729M worth of XRP that Ripple sold to institutional buyers - that was a security sale.

But those "programmatic" sales through exchanges and algorithms were not a security sale due to their speculative nature.

Secondary market sales were excluded from the scope of this case.

Market Impact

The second this news broke, the entire crypto market started rallying.

And several tokens rallied all day.

XRP was the big winner on the day, ripping 69% to 0.8 (and a $83B marketcap, passing BNB to become the 4th biggest crypto token).

BTC and ETH saw modest gains, up 2% and 6% respectively.

But the big winners were the tokens (alts) that were recently named as securities in the recent SEC cases against Binance and Coinbase, many of which saw their values take huge hits.

Some notable gainers:

• SOL: +26% to $28.13
• ADA: +21% to $0.35
• MATIC: +9% to $0.84
• AVAX: +17% to $15.43
• APT: +9% to $7.69
• IMX: +12% to $0.78

And PEPE surged too (because of course it did), popping 17% to a $690M marketcap (for the memes).

The other major winner here - Coinbase.

A primary takeaway from this ruling is that selling tokens through ICOs and direct institutional sales are a no-no.

That leaves the primary option of selling through exchanges, and Coinbase is set to be the partner of all the biggest players.

$COIN stock popped 25% to $107 yesterday on the news - clearly the market thinks Coinbase is a major winner here too.

What Next

For the first time, crypto companies are starting to get some guidance via the courts on how to issue tokens legally.

And it seems there is some support in Congress to use this ruling to create laws and a framework for companies to operate within.

From GOP Majority Whip Tom Emmer:

"The Ripple case is a monumental development in establishing that a token is separate and distinct from an investment contract it may or may not be part of. Now, let’s make it law."

The playbook has been established.

Don't sell OTC or direct to investors, use exchanges and distribute programmatically via your protocol and you should be safe.

This seems to be a major win for airdrops, which are a common way to distribute tokens "programmatically."

While it sounds like jargon, using math and algorithms to determine which users receive which allocations of tokens based on past activity is programmatic distribution.

That's how airdrops typically work - and now those seem safe and legal!

So maybe airdrop season is around the corner!

With that said, Ripple is certainly not out of the woods yet. They could face major fines for their illegal security sale to the institutions. And other companies that have done similar actions in the past are likely facing some trouble as well.

But this seems like a major win for the crypto industry and a major blow to the SEC.

Confidence is rebuilding in this sector.

Now let's not blow it.

🚚 What else is happening in NFTs?

Here is the list of other notable headlines from the weekend in NFTs:

• Trading volume came in around 10k ETH again on Thursday; NFT movers were mostly even or red, with Captainz (+7%) as the primary exception in green
• BAYC made 2 major event announcements yesterday, that ApeFest would be in Hong Kong from Nov 3-5, and that they're hosting a MAYC 2-yr anniversary celebration in Miami on August 26 (details to come)
• Sam Spratt shared new details for his upcoming art drop, with a supply of 256, square artwork, connections to his 1/1s and Skulls and that it won't function like a typical edition
• The Ether team announced a royalty cut from 7.5% to 3.5% yesterday "after careful consideration," though it was their 2nd rate change in 2 days; floors have been falling fast, now 0.2 ETH (unrevealed) and 0.14 ETH (revealed)
• A gold Bored Ape sold for 600 ETH ($1.2M yesterday) while the CryptoPunks floor crossed the $100,000 threshold (50.3 ETH)
• The Doodles Community Council introduced "The Inkubator," with a mission to provide a launchpad enabling Doodles holders to connect and collaborate on endeavors that enrich the community and expand the brand via events and RFPs
• Notable collector and founder Seedphrase announced he has signed with WME to expand his brand in fashion, music and digital art

🌎 Around Crypto and Web3

A few other Crypto and Web3 headlines that caught my eye:

• The crypto market (notably alts) rampaged after the XRP news; BTC +2% to $31,170; ETH +5.7% at $1,990
• Celsius ex-CEO Alex Mashinsky was arrested yesterday, accused of a multi-year scheme to mislead customers
• Binance Labs invested $15 million in Xterio, a prominent Web3 game platform, for the development of AI-enhanced on-chain gaming
• Polygon proposed $POL as the new "Hyperproductive" native token for Polygon 2.0, set to replace MATIC in a 1:1 ratio; the token is "hyperproductive" as validators can validate multiple chains and perform multiple roles 

🚀 NFT Total Volume

• BAYC (1,657 ETH, 33.7 ETH Floor)
• Azuki (1,425 ETH, 6.37 ETH)
• MAYC (1,398 ETH, 6.36 ETH)
• DeGods (807 ETH, 8.92 ETH)
• Captainz (419 ETH, 5.93 ETH)

📈 NFT Floor Price Increase

• Wrapped CryptoCats (149%, 2.47 ETH Floor)
• Sproto Gremlins (79%, 0.52 ETH)
• Gucci (69%, 0.34 ETH)
• 10ktf (56%, 0.14 ETH)
• Rug Genesis (53%, 0.2 ETH)

🗓 Upcoming NFT Mints and Reveals

Today is a very slow day of new drops with just 2 notable mints on the radar from the art world.

Art Blocks has been busy this week, with seemingly a drop every day. The market seems to be responding, with all but Net Net Net minting out this week. Today's "Enigma" from Ralen Arc will put that trend to the test with 240 supply.

Overall it's not a great market set up for new drops with crypto surging, so expect a quiet weekend on the NFT front.

If you want more, see the full list of today's drops from Swizzy's daily mint monitor. 

• Refik Anadol "Winds of Yawanaw" (12:00 p.m. ET)
• Art Blocks Presents "Enigma" (1:00 p.m. ET); Dutch auction

Enjoy this write-up? Follow along with me on Twitter @tyler_did_it or reach out via email tyler.warner@luckytrader.com.

For all volume and floor price data, see Lucky Trader's Project Rankings page.

For all upcoming mints, see Lucky Trader's NFT Calendar page.