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Welcome back to Distributed Ledger — your one-stop-shop for all things crypto. I’m Chris Matthews, a reporter in MarketWatch’s D.C. bureau, where I cover the intersection of public policy and markets.

Ripple’s vindication

The crypto industry continues to rack up wins in Washington, with Ripple Labs CEO Brad Garlinghouse announcing on X on Wednesday that the Securities and Exchange Commission will drop its appeal of a lawsuit brought against it, alleging that the company sold unregistered securities when it distributed the token to investors in 2013.

The SEC declined to comment on Garlinghouse’s statements.

XRP XRPUSD surged more than 12% on the news, while bitcoin BTCUSD and ether ETHUSD were also gaining in sympathy.

The news was welcome for a market that has struggled for direction as euphoria over Trump’s election and the hopes of a crypto-friendly administration has given way to resignation that the industry needs more than friendly regulations to thrive.

The lack of enthusiasm around real-world use cases of most cryptocurrencies can be seen in recent price action, according to Alex Kuptsikevich, chief market analyst at FxPro.

For more than three years, the share of total crypto-market capitalization in bitcoin has been growing, and now sits at nearly 60%, up from 38% in 2022.

“Interest from institutional traders and governments has so far not extended beyond the first cryptocurrency, which they see as a strategic-reserve asset rather than the practicality offered by altcoins, including ETH,” Kuptsikevich wrote in a Wednesday note to clients.

The crypto research collective Alpha Please put a finer point on the phenomenon in an X post Wednesday .

“There is only so many times people are willing to buy useless alts because they think they can sell them to someone else in the future,” they wrote. “We have exhausted the pool of retail investors willing to buy these tokens. I really do feel like that era of crypto is mostly over. We have an inflows problem until crypto (not BTC) proves it can deliver on its promises.”

Meanwhile, investors should expect further progress on the regulatory front to be slow-moving, according to a recent analysis by Jennifer Schulp, director of financial regulation studies at the libertarian Cato Institute.

She notes that it will take time to craft a new regulatory framework for crypto assets, and that this work will require Congress to act in a deliberative process that will be measured in years rather than weeks.

“While the path forward for the crypto industry may be brighter, potential roadblocks still lie ahead,” she wrote in a Tuesday analysis. “Like the difference between vibes and policy, there’s a big distinction between regulatory changes that allow crypto to compete and changes that give crypto the upper hand.”

Some experts also worry that absent federal regulatory oversight, crypto scams could proliferate and leave many potential crypto users sore from the experience.

The New York Times and Chainalysis estimated that more than 810,000 crypto wallets had suffered a collective $2 billion in trading losses from President Donald Trump’s meme coin, called $Trump, as of the first week in February, and since that time the price has continued to fall from its peak of nearly $73 the day before the inauguration to just $11.20 toda y.

The SEC has washed its hands of any supervisory authority over these meme coins, likening them to collectibles like baseball cards, in a recent staff statement.

There are sound arguments for why the SEC, under current law, has no authority to regulate meme coins, but the agency’s characterizing them as mere collectibles could give a government seal of approval to tokens that are clearly being used as devices for financial speculation rather than pure love of abstract digital assets.

Financial economist J.P. Koning wrote in recent analysis that the SEC’s labeling meme coins as mere collectibles is “naïve, even dangerous,” because it “effectively whitewashes meme coins into the relatively benign social-economic bucket as baseball cards, postage stamps and Roman coinage.”

Whether or not the SEC’s stance encourages more Americans to lose money on meme coins remains to be seen, but the industry may need to reckon with the obvious fact that many Americans have already been burned by their dalliances with digital assets.

Strategy’s new bitcoin strategy

Microstrategy dropped the “micro” from its name in February, and its recent bitcoin purchases have been anything but mini.

Strategy MSTR announced Tuesday that it plans to market a new type of stock that offers investors an 8% cash dividend that can convert to common stock if the preferred shares appreciate by 900%.

The cash dividend has sparked debate in crypto circles on whether the company can afford such a hefty dividend given the relatively modest cash flow, but Strategy can always offload some bitcoin to make good on the payments.

The company plans to use the money to buy more bitcoin and to pay general expenses. It now owns 499,226 BTC, acquired for roughly $33.1 billion, or an average cost of $66,360 per bitcoin.

Crypto snapshot

Bitcoin gained 3.3% over the past week amid a broader market stabilization, though the world’s most popular crypto’s inflows were more muted than several altcoins.

Ether ETHUSD rallied 8.8% over the past seven days, while Solana ADAUSD added 5.9% , Cardano ADAUSD rose 6.1% and Dogecoin gained 4.1%.