XRP Price Slump: Why The Big 45% Fall?

ANKARA, TURKIYE - MARCH 07: In this photo illustration, the 'XRP Ripple' logo is displayed on a ... More mobile phone screen in front of a computer screen displaying the 'Cardano Ada' logo in Ankara, Turkiye on March 07, 2025. (Photo by Harun Ozalp/Anadolu via Getty Images)
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Ripple’s cryptocurrency, XRP, has recently experienced a significant price decline, plummeting nearly 45% from over $3.20 in January to around $1.80. This drop is largely attributed to growing macroeconomic uncertainties sparked by President Donald Trump’s recent announcement of broad tariffs on goods from over 100 countries. These tariffs have heightened concerns about their potential negative impact on the U.S. economy and consumer spending. The situation is further exacerbated by China's unexpectedly high retaliatory tariffs, which are intensifying the ongoing trade war. Consequently, both traditional financial markets and the cryptocurrency market, including XRP, are currently facing downward pressure. For a more detailed analysis of market risk related to these tariffs and their broader impact, please refer to our insights on market crash risk.
Before its recent fall, XRP experienced a remarkable sixfold increase in value, surging from around $0.50 in November of last year to over $3 by mid-January of this year. This significant rally in XRP mirrored a broader positive trend observed across the cryptocurrency market during that period. This surge was fueled by growing enthusiasm for digital currencies, potentially influenced by expectations surrounding global economic policies and technological advancements under President Trump at the time. Consequently, Bitcoin, the leading cryptocurrency, surpassed the $100,000 mark for the first time, more than doubling from its early 2024 level of $44,000. However, the subsequent escalation of the ongoing tariffs issue has negatively impacted the cryptocurrency market as a whole, causing even Bitcoin to fall below $80,000.
In addition to these broader market factors, XRP had its own specific catalyst for potential growth. Since 2020, Ripple has been involved in a legal dispute concerning the classification of XRP as an unregistered security offering. Recently, the U.S. SEC dropped this case against XRP. While this development would typically be expected to trigger a substantial price increase, the prevailing negative macroeconomic conditions took precedence, leading to a correction in XRP's price as investors opted to secure profits at higher levels. Furthermore, the market had likely already factored in the potential positive outcome of the SEC case to some extent during the earlier sharp rally in XRP.
Ripple operates a digital payment network that utilizes its cryptocurrency, XRP, to enable fast and low-cost international money transfers. Increased adoption and usage of XRP within this core business would naturally drive its price upward. Looking ahead, there are potential catalysts that could significantly boost XRP's adoption and price. Firstly, there's a strong possibility that an XRP exchange-traded fund (ETF) could receive approval this year, which would likely increase investor demand. Secondly, the ongoing expansion of the XRP Ledger ecosystem will further enhance Ripple's overall acceptance and utility, indirectly benefiting XRP.