XRP Experiences 40% Decline Amidst Market Turmoil, Investors Await SEC Decision
April 4, 2025
By Osato Avan-Nomayo, DeFi Correspondent
In a climate of increasing uncertainty within the cryptocurrency market, XRP, the digital asset created by Ripple, has plummeted by 40% following a dramatic market downturn. The price of XRP recently traded just above $2, a stark decrease since the high enthusiasm surrounding the asset coinciding with Donald Trump’s inauguration. This dip is nearly double the percentage loss experienced by Bitcoin in the same timeframe, raising alarms among investors.
Market Influences and Investor Sentiment
The downturn in XRP’s value has coincided with a broader slump in global markets, which has been intensified by escalating trade tensions. As various stakeholders adopt a risk-averse approach, assets perceived as speculative, like XRP, face heightened vulnerability. For many retail investors who jumped on XRP’s rising trend towards the end of last year, the timing of this decline has been particularly unfortunate.
Market analysis from Glassnode indicates that XRP’s market capitalization surged to $64 billion over the past six months, largely fueled by retail investor enthusiasm. However, the influx of capital appears to be waning, with analysts noting a slowdown in speculative interest since February. "The easy money is drying up," remarked analysts at Glassnode, adding that many new investors are now experiencing significant losses. If fresh buying interest does not emerge soon, XRP may continue its downward spiral.
Predictions and Future Prospects
Looking ahead, prediction markets are reflecting a bleak outlook for XRP. Data from the crypto prediction platform Kalshi suggests that investors believe there is a less than 50% chance that XRP will hit a new peak in 2025. Furthermore, there is skepticism about XRP reaching a new all-time high by summer’s end.
The recent surge in XRP prices in December has been characterized as driven more by speculative retail trading than by genuine demand, contrasting sharply with more sustained patterns observed for Bitcoin. In light of these developments, some industry observers are now turning their attention to potential XRP exchange-traded funds (ETFs) as a means to attract institutional investors.
The U.S. Securities and Exchange Commission (SEC) is currently reviewing five applications for XRP ETFs, amidst a wave of interest surrounding various altcoin ETF filings. The regulatory body has until mid-October to make a ruling on these applications. Analysts from JPMorgan forecast that, if approved, XRP ETFs could generate approximately $8 billion in investment within their first year, with up to 10% of this amount potentially flowing in during the initial week of trading.
Nate Geraci, President of The ETF Store, has expressed confidence in the imminent approval of XRP ETFs, emphasizing the involvement of major financial institutions like BlackRock and Fidelity in this endeavor. Even though bettors on Polymarket have recently reduced the probability of SEC approval for XRP ETFs this year to 73%, down from an earlier peak of 87%, many remain optimistic. Geraci summarized the sentiment succinctly: “An XRP ETF approval is simply a matter of time.”
As the cryptocurrency landscape continues to evolve, XRP faces significant challenges ahead, and the forthcoming decisions from regulatory bodies will likely play a pivotal role in shaping its future trajectory.
Osato Avan-Nomayo is a DeFi correspondent based in Nigeria covering developments in DeFi and technology. For inquiries or tips, he can be reached at [email protected].
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