Bitcoin prices edged higher on Thursday, rising 1% to $57,969.0 by 09:03 ET (13:03 GMT), as broader market volatility left cryptocurrency traders cautious. The slight recovery follows a recent plunge that took Bitcoin down to around $49,000 earlier in the week, though it remains below pre-rout levels.
XRP, however, saw a significant surge, climbing over 18% to $0.61. This sharp rise came after Ripple Labs, the issuer of XRP, was ordered to pay a $125 million fine to the U.S. Securities and Exchange Commission (SEC). The penalty, imposed by District Judge Analisa Torres of the Southern District of New York, was for violating securities law in Ripple’s institutional sales of XRP. Additionally, Ripple was ordered to register any future sales of securities.
Despite the fine, which was significantly less than the $2 billion originally sought by the SEC, Ripple CEO Brad Garlinghouse declared it a victory. “We respect the Court’s decision and have clarity to continue growing our company. This is a victory for Ripple, the industry, and the rule of law,” Garlinghouse stated on social media. The SEC’s next move, including whether it will appeal the decision, remains uncertain.
Despite XRP’s gains, it has not fully recovered from the losses incurred over the past week.
Broader Crypto Market Struggles Amid Risk Aversion
The broader cryptocurrency market saw flat to low trading on Thursday, reflecting the ongoing aversion to risk-driven assets. This follows concerns over slowing U.S. economic growth and rising interest rates in Japan, which have dampened sentiment.
Although the SEC-Ripple ruling addressed a significant issue in the crypto market, it did not clarify broader U.S. regulatory intentions for the industry. This, combined with the speculative nature of cryptocurrencies, has kept traders cautious.
Elsewhere in the market, Ether, the world’s second-largest cryptocurrency, rose 0.8% to $2,482.09. ADA/USD saw a slight decline, while SOL/USD gained 1.5%. Among meme tokens, DOGE rose 0.4%, while SHIB dropped 2.7%.
Analysts Warn U.S. Consumer Debt Could Impact Crypto Market
Analysts at 10x Research have pointed out that the U.S. consumer’s financial health could pose challenges for the cryptocurrency market. Federal Reserve data revealed a slowdown in consumer borrowing, with total credit outstanding increasing by $8.9 billion in June, below expectations and marking a significant drop from the previous month. Revolving debt, primarily credit cards, fell by $1.7 billion, the largest decrease since early 2021, while non-revolving debt, including student and auto loans, rose by $10.6 billion.
Rising delinquency rates also suggest that U.S. households are struggling with their finances. Credit card delinquencies, defined as payments over 90 days late, hit 10.93% in the June quarter, the highest since early 2012. Auto loan delinquencies reached 4.43%, the highest since 2021. These indicators suggest that U.S. consumers may have exhausted their borrowing capacity, potentially limiting the flow of fiat currency into the cryptocurrency market.
“Weak U.S. consumer credit data, marked by a drop from $11.3 billion to $8.9 billion—below the expected $10 billion—due to rare negative credit card debt and soaring delinquencies, signals a collapsing personal savings rate. This is significant for crypto as it suggests the fiat-to-crypto onramp will remain constrained due to maxed-out U.S. consumers,” 10x Research noted in a client report obtained by CoinDesk.
The report also cited additional risks to the crypto market, including uncertainty surrounding the U.S. election, a slowing U.S. economy, and fading hype around artificial intelligence.
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