The SEC’s Move on XRP Has Sparked a Debate: Is It Now Considered a Commodity?

The SEC's move has sparked debate about whether XRP, like Bitcoin and Ethereum, is now considered a commodity. However, the agency has not

The U.S. Securities and Exchange Commission (SEC) has acknowledged several applications for XRP-linked exchange-traded funds (ETFs), a move that could have a major impact on the regulatory status of the digital asset.

According to crypto journalist Eleanor Terrett, the SEC’s handling of XRP ETFs suggests that issuers are treating XRP like a commodity within a securities framework. “They have acknowledged that issuers are applying for a product that classifies XRP as a commodity asset within a securities wrapper,” she noted in a recent social media post.

However, regulatory authorities have yet to provide definitive confirmation regarding XRP’s classification.

The regulatory status of XRP has been under scrutiny due to Ripple Labs’ ongoing legal battle with the SEC. The lawsuit, which began in 2020, centers on whether XRP is a security.

In a landmark ruling last year, a U.S. court determined that XRP is not a security in secondary market transactions, a decision that was seen as a win for the crypto industry.

However, the court also ruled that Ripple's direct institutional sales of XRP constituted unregistered securities offerings, leaving a gray area in its overall classification.

The SEC has since paused additional litigation against Ripple as its crypto task force reassesses regulatory frameworks. Legal experts believe an appeal remains possible, and the case could eventually be reviewed by the U.S. Supreme Following the SEC’s green light for XRP-tied ETFs, trading activity surged. Trading volume rose by 30% within the first hour, with a sudden spike in active addresses that were engaging with the XRP Ledger.

Exchanges such as Binance and Coinbase experienced high trading, an indication of the high investor demand. The price of XRP also surged to $2.84 on February 15, a 22% increase in five consecutive trading days.

Experts claim that if XRP crosses the $2.80 resistance, it could go to the psychological price of $3.00 or higher. They caution that pressure from sellers could cause the price to trade between $2.60 and $2.80. Some put estimates that if a break to the upside occurs, XRP will probe new all-time highs of $15 to $17 in the longer term.

The SEC’s treatment of XRP may also influence broader regulatory cases against major crypto exchanges, including Binance and Coinbase.

Both websites have been under investigation for the sale of unregistered securities, and their court battles have been temporarily stayed by the SEC’s crypto enforcement task force.

If XRP is ultimately a commodity, it could be a bellwether for how analogous digital assets would be treated.

Market observers believe that the official commodity status for XRP would have a significant impact on its adoption and price trajectory. Some speculate that such a classification could pave the way for institutional investment and push XRP’s valuation beyond $110 in the long term.

The recent shift in the SEC stance against crypto regulation has fueled rumors that the agency will abandon its court case against Ripple.

The SEC only recently greenlit 19b-4 filings of Grayscale and 21Shares for XRP spot ETFs, which some view as the agency softening its stance on the digital asset.

Moreover, leadership changes in drama at the SEC, such as the commission’s naming of Mark Uyeda as acting chair and Hester Peirce as head of the new Crypto Task Force, can inform regulatory priorities.

Legal professionals show that if the SEC withdraws its appeal in the Ripple matter, XRP can experience a sudden price surge, likely reaching more than its previous all-time high of $3.55 and moving towards $4.00.

Alternatively, if the SEC presses on with the appeal, XRP can experience downward pressure, likely falling to $1.50.

XRP’s future remains closely tied to regulatory developments and investor sentiment surrounding ETF approvals. The next major milestone will be the SEC’s final decision on XRP ETFs, which could determine whether the agency officially recognizes the asset as a commodity.

While the regulatory landscape remains uncertain, analysts advise investors to monitor legal proceedings and SEC announcements closely. Broader macroeconomic factors, including Federal Reserve policies and global crypto adoption, will also play a role in shaping XRP’s long-term trajectory.

For now, the crypto community remains on edge, awaiting the SEC’s next move—and hoping for long-awaited regulatory clarity on XRP’s classification.

If you are wondering what crypto to buy now, you might have to wait longer for XRP certainty.