On Thursday, XRP prices shot up to $50 per token on the Gemini exchange for a few minutes before quickly reverting to parity with the spot markets on other exchanges. This sudden bump, which took only a few seconds to correct, was likely caused by low liquidity in the hours following the token’s relisting on Gemini. It is possible that a buyer placed an outsized market order which was filled at an unusually high price. According to price chat data, XRP traded at levels higher than the broader market for a few hours.
Some market observers believe that a seller placed a spoof order at $50 per XRP, which was unintentionally filled by a buyer who may have made a mistake. Market depth data shows that XRP liquidity on Gemini is still relatively low, with only a $37,000 order required to move prices by 2%. In comparison, the same price move on Binance would require at least $2.2 million.
The tokens were relisted on Gemini after a court order in July ruled that the “offer and sale of XRP on digital asset exchanges did not amount to offers and sales of investment contracts.” This was in response to allegations that Ripple Labs sold XRP, a security, to U.S. customers without proper registration with the U.S. Securities and Exchange Commission (SEC). At the time of writing, XRP was trading at 63 cents.