XRP's Thursday Test: A Draft Bill's Regulatory Gambit

The immediate regulatory test for XRP hinges on a single, specific provision in a draft Senate bill. The legislation, known as the Digital Asset Market Clarity Act, proposes to classify certain large-cap cryptocurrencies as "non-ancillary" assets. This would effectively exempt them from being treated as securities under federal law, a status the SEC has long contested for XRP.

The key mechanism is binary and time-bound. A token qualifies for this new category if, on January 1, 2026, any units of that network token were the principal asset of an exchange-traded product listed and traded on a national securities exchange. Based on existing listings, this provision would apply to XRP, Solana, Dogecoin, and others, granting them a regulatory status parallel to Bitcoin and Ethereum from the bill's effective date.

This creates a direct, high-stakes catalyst. The Senate Banking Committee is scheduled to debate and potentially amend the bill in a markup hearing this Thursday. Passage of this specific clause would grant XRP immediate regulatory clarity and open the door to spot ETF eligibility. Failure would leave the current uncertainty intact, with the SEC's enforcement stance remaining the primary arbiter of XRP's status. The outcome is a pure binary event: a green light for institutional access or a continuation of the regulatory gray zone.

The Trade Setup: Price Action and Key Levels

The market is already pricing in the regulatory bet. XRP surged 4.94% today, outperforming Bitcoin and Ethereum, as investors focused on the draft bill's potential. This rally shows the stock's sensitivity to the Thursday catalyst. The immediate trade setup is clear: the price action is a direct reaction to the event's anticipation, and the levels to watch will define the risk/reward.

On the upside, a decisive break above $2.70 is the key technical signal. Analysts note this level could trigger a rapid move toward a new all-time high. The current price, hovering near $2.15, sits well below that target, indicating significant upside if the bill passes. Conversely, a drop below the recent low of $2.05 would signal the rally is stalling and that the market is digesting the news or preparing for a potential disappointment.

The trade hinges entirely on the Thursday hearing outcome. Any amendments to the bill or unexpected delays would likely trigger a sharp sell-off, as the binary event's clarity is compromised. For now, the bullish momentum is intact, but the setup is fragile. The rally to date is a bet on a specific legislative event; the technical levels are the battlefield where that bet will be settled.

Risk/Reward: The Markup Hearing Gambit

The binary event creates a classic risk/reward setup. The upside is a clear, institutional path. Passage of the bill would grant XRP a "Bitcoin-like" regulatory status, directly enabling spot ETFs. This isn't just theoretical; the bill's framework explicitly provides tailored exemptions for exchange-traded products, signaling legislative intent to accommodate them. For Ripple, this unlocks a new channel for adoption and could drive significant demand. The price action already reflects this potential, with analysts pointing to a $2.70 breakout as a catalyst for a new all-time high.

The primary near-term risk is legislative failure. The markup hearing this Thursday is just the first hurdle. The bill must survive amendments and then pass the full Senate, a process fraught with political uncertainty. As one expert noted, the "wild card is U.S. politics", with the bill's fate tied to upcoming mid-term elections. A failed markup or a diluted final bill would leave XRP's regulatory status unchanged, maintaining the current uncertainty that has hampered institutional access for years. This would likely trigger a sharp reversal from the current rally.

The next major catalyst is the hearing outcome itself. Watch for any changes to the ETF eligibility criteria, which are currently tied to the January 1, 2026 ETP listing requirement. Even if the core "non-ancillary" provision passes, amendments could weaken its impact. For now, the setup is a high-stakes bet on a single legislative event. The upside is substantial if the bill clears the committee, but the risk of a political stumble is real and immediate.