Why Is Empower Oversight Suing the SEC?
Empower Oversight’s lawsuit could have direct implications for the Ripple case. Acting Chair Uyeda could justify an appeal withdrawal if the OIG investigation uncovers crypto conflicts of interest, where the agency acted biasedly against Ripple and XRP.
The controversy dates back to 2018, when former SEC Division of Corporation Finance Director William Hinman declared that bitcoin (BTC) and ethereum (ETH) were not securities. However, Empower Oversight alleges that Hinman received millions from his former employer, legal firm Simpson Thacher while advising the agency on crypto regulations.
After leaving the SEC, Hinman returned to Simpson Thacher, a firm that actively promotes Enterprise Ethereum. During the Ripple case, Judge Analisa Torres rejected at least six attempts by the SEC to shield the Hinman speech-related documents under the attorney-client privilege. The Hinman speech-related documents revealed that Hinman continued meeting with Simpson Thacher employees despite warnings from the SEC’s Ethics Division.
ETH and XRP competed in 2018 for the second-largest crypto by market cap. Hinman’s speech likely contributed to ETH cementing its status as the dominant alternative to BTC.
XRP Price Trends: Will the SEC Trigger a Move Toward $5
On Wednesday, February 12, XRP gained 2.52%, reversing Tuesday’s 0.46% loss, closing at $2.4741. The move aligned with the broader market, which rose 2.62%, taking the total crypto market cap to $3.18 trillion.
However, XRP remains well below the January 16 high of $3.3999 and its 2018 record high of $3.5505 as uncertainty about the SEC’s appeal lingers.
Key Price Scenarios:
- Bullish Case: If the SEC withdraws its appeal, XRP could rally past its all-time high of $3.5505.
- ETF Catalyst: Approval of an XRP-spot ETF may drive XRP toward $5, fueled by institutional demand.
- Bearish Case: If the SEC proceeds with the appeal and disapproves XRP-spot ETF applications, the token could slide below $1.50.
US Strategic Bitcoin Reserve in Focus
Wednesday’s brief pullback was followed by a rebound, with BTC gaining support from progress toward a national US Strategic Bitcoin Reserve (SBR). In late 2024, Senator Cynthia Lummis introduced the Bitcoin Act, proposing the US government acquire one million BTC over five years, with a mandatory holding period of 20 years. A US SBR would tilt the supply-demand balance firmly in BTC’s favor.
While Senator Lummis pushes for Congress to support the bill, state-level momentum is rising.
- The House for the US State of Utah recently passed legislation for an SBR.
- New Hampshire lawmakers introduced HB92, proposing that 10% of state funds be allocated to BTC ETFs.
The number of states eying an SBR is growing beyond Trump’s footprint. Massachusetts and New Hampshire, traditionally blue states, are also advancing BTC-related legislation.
If Congress passes the Bitcoin Act, it could fuel global FOMO, similar to past trends in gold accumulation.
Amicus Curiae attorney John E Deaton recently stated:
“If the US Government (USG) passes Senator Lummis’ Bill and begins buying BTC, it will no doubt cause other nations to follow suit, just like with gold. It could literally create Nation State FOMO, and if that occurs, $1M per BTC happens a lot faster than people think.”
Bitcoin Price Outlook
On Wednesday, February 12, BTC gained 2.17%, reversing Tuesday’s 1.71% loss, closing at $97,881.
While progress toward a national SBR remains crucial, other key factors to watch include:
- US Tariff policies and trade tensions.
- Upcoming US producer prices and jobless claims data.
- US BTC-Spot ETF Market Flow Trends.
Possible Scenarios:
- Bearish: Rising tariffs, strong US economic data, and a hawkish Fed could push BTC toward $90,000.
- Bullish: Easing US-China tensions, weaker US economic indicators, and increased BTC-spot ETF demand could send BTC toward its all-time high of $109,312.
