A surprising theory has emerged in the world of cryptocurrency, raising discussions on whether the U.S. Securities and Exchange Commission (SEC) might settle its long-running lawsuit with Ripple Labs by accepting XRP tokens instead of cash. The suggestion comes from crypto influencer John Squire, who has captured the attention of the crypto community with this unconventional idea.

Squire’s Theory: SEC Delaying ETF Approval to Control XRP’s Price

John Squire recently tweeted that the SEC might intentionally delay the approval of XRP spot exchange-traded funds (ETFs) to avoid pushing XRP’s price higher before a potential settlement deal. The logic behind this theory is rooted in how spot ETFs differ from futures ETFs. While futures ETFs invest in contracts that speculate on an asset’s price, spot ETFs buy the asset itself—meaning a surge in demand could push XRP’s price up.

If the SEC is planning to settle with Ripple using XRP as a form of payment, a price spike could make the cryptocurrency too expensive for the government to accept. To prevent this scenario, Squire suggests the SEC could be delaying the ETF approval process to keep XRP’s price lower and more manageable for any potential settlement agreement.

Delaying the ETF: A Strategic Move?

The theory gained more weight when journalist Eleanor Terrett confirmed that the SEC had postponed its decision on Franklin Templeton’s XRP spot ETF until June 17. Squire argues that this delay is part of a broader strategy to keep XRP’s price from rising too quickly, potentially interfering with the settlement process.

The key here is that XRP’s price is highly sensitive to market demand. A spot ETF, by directly purchasing XRP, could send its price soaring if approved. But if the SEC has already decided to settle the case using XRP, they may want to ensure the token remains at a reasonable price to avoid complications in negotiating a deal.

XRP as a Settlement: What Would It Mean?

If the SEC were to accept XRP as part of a settlement, it could signal a major shift in how the U.S. government views the cryptocurrency. Currently, the SEC has labeled XRP as a security, which has fueled its legal battle with Ripple over the past few years. However, accepting XRP as a form of payment would imply that the SEC no longer sees the cryptocurrency as illegal or outside regulatory bounds.

Such a settlement could pave the way for clearer regulatory guidelines surrounding XRP, potentially leading to greater institutional investment in the cryptocurrency. It could also remove one of the major clouds hanging over Ripple’s operations, which could reignite investor confidence and trigger a new bullish phase for XRP.

XRP Price Outlook: What’s Next?

At present, XRP is trading at around $2.20, reflecting a slight dip of 0.63% and a market cap of $129.13 billion. While the cryptocurrency’s price has experienced some volatility recently, technical indicators suggest that XRP could see a strong upward trend if it breaks through the $2.40 resistance level. If this happens, it could reach $2.60 or even $2.90 in the coming days.

However, if XRP fails to maintain support above $2, there’s a risk of further downward movement, potentially triggering large sell-offs in the market. Investors will be closely watching the next few weeks for signs of price movement, especially in light of the potential ETF decision and the ongoing lawsuit.

The Ripple Case: A Turning Point for XRP?

As the legal battle between Ripple and the SEC continues to unfold, the possibility of a settlement using XRP could mark a significant turning point for the cryptocurrency. If the SEC accepts XRP as a settlement payment, it would not only bring regulatory clarity but could also open the door for future growth and adoption.

Whether or not the SEC will actually settle with XRP remains uncertain, but Squire’s theory has raised new discussions about the potential future of Ripple and its token. For now, investors are left to monitor developments, including the SEC’s upcoming decision on the ETF, which could offer more clues about the future direction of XRP.