Comparing XRP's Financial Metrics with Nvidia Amid SEC Lawsuit and Global AI Surge
Summary:
The cryptocurrency XRP's price-to-sales ratio is almost double that of Nvidia, a highly traded stock. Ripple, the firm behind XRP, generated over $583,000 in network fees in 2023, compared to Nvidia's revenue of $26.97 billion. Despite the SEC's lawsuit against Ripple since December 2020, the XRP token's price rose 20.55% over the past year, while Nvidia’s share price rose 241% due to increased demand for semiconductor chips used in AI models. The SEC proposed a $1.95 billion civil penalty for Ripple, accusing the company of defying law by continuing to sell XRP after legal warnings.
In the financial world, the price-to-sales ratio of cryptocurrency XRP (XRP) is nearly twice that of Nvidia, a highly traded stock. The numbers reveal a ratio of 61.689 for XRP and 37 for Nvidia, with these figures calculated by dividing a firm's market capitalization by its sales revenue over the previous year. A lower ratio is associated with a more desirable investment opportunity. As per Messari's reports, Ripple's XRP ledger produced over $583,000 in network fees in 2023, whereas Nvidia reported a 2023 revenue of $26.97 billion, according to its fiscal report from the same year.
As per data from CoinMarketCap, the XRP token registered a modest 0.15% increase over 24 hours, reaching $0.6205 and securing a $34 billion market capitalization at 10:30 am UTC. On the other end, Nvidia shares (NVDA) recorded a 0.49% drop in pre-market trading, falling to $898.25, as indicated by Yahoo Finance data.
Spearheading the semiconductor chip manufacturing sector globally, Nvidia ranks as the third largest firm worldwide, carrying a striking $2.25 trillion market capitalization. The company experienced a significant 265% surge in its year-on-year revenue, fuelled by the growing global demand for equipment designed for artificial intelligence (AI).
Over the last year, XRP price increased by 20.55%, while Nvidia’s stock price saw a remarkable 241% increase, primarily due to the surge in worldwide demand for semiconductor chips, vital for advanced AI models. XRP/USDT and NVDA/USD, 1-year chart. Source: TradingView.
XRP's price has been facing increased tension since December 2020, when the U.S. Securities and Exchange Commission (SEC) demanded legal action against Ripple, CEO Brad Garlinghouse, and co-founder Chris Larsen, accusing them of raising $1.3 billion through unlawful securities offerings via XRP token sales.
This lawsuit gained even more significant attention in July 2023 when Judge Analisa Torres decided that XRP was not a security in relation to programmatic sales on digital asset exchanges. However, Judge Torres did determine that XRP is considered a security when sold to institutional investors, fulfilling the Howey Test's criteria.
As per a court filing on March 25, the SEC recommended Ripple to pay a total civil penalty of $1.95 billion, which is attributed to "defiance of the law," as Ripple continued to sell XRP despite legal warnings.
Published At
3/28/2024 2:08:04 PM
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