Down 30%, Can XRP Price Bounce Back?

The significant optimism surrounding Trump’s ascension to the U.S. presidency has not yielded the anticipated positive impact on the cryptocurrency market. Rather than a continued appreciation in value, major cryptocurrencies have experienced declines from their December-January peak levels. Bitcoin has dropped 13% from its recent high, while Ethereum has experienced a more substantial 37% decrease, and Ripple has fallen by 30%.

Image by Miloslav Hamřík from Pixabay

The recent cryptocurrency decline can be attributed to several factors related to President Trump’s economic and foreign policies. His announcement of tariffs on Canada, Mexico, and China has created market anxiety. These tariffs are expected to remove lower-priced goods from the market, potentially triggering price increases and higher inflation. This inflationary pressure could constrain the Federal Reserve’s ability to implement interest rate cuts.

Adding to market uncertainty is the ongoing situation in Eastern Europe. President Trump has requested mineral rights in Ukraine valued at approximately $500 billion in exchange for U.S. aid, while President Zelensky maintains his position on NATO membership for Ukraine and is seeking more favorable terms regarding the mineral rights arrangement. ^[1] Putin recently stated that Russia must work to build trust with the United States and emphasized the importance of including Europe in the Ukraine peace negotiations. ^[2] This standoff suggests the conflict is unlikely to reach a swift resolution anytime soon, further contributing to global economic uncertainty that weighs on cryptocurrency markets.

All these aforementioned factors indicate heightened economic uncertainty and diminishing risk appetite among investors. This environment creates unfavorable conditions for cryptocurrencies. For perspective, examining how these digital currencies performed during the 2022 economic downturn provides a relevant historical comparison.

• Bitcoin (BTC): In June 2022, Bitcoin traded at approximately $31,792, just prior to the Federal Reserve’s initiation of rate hikes. Subsequently, its price fell to a low of about $15,600 in November 2022. By October 2023, Bitcoin had rebounded to roughly $32,000, and it continued an upward trajectory, ultimately surpassing the $100,000 milestone in December 2024.

• Ethereum (ETH): Ethereum experienced a precipitous decline of nearly 50% over a two-week period – dropping from approximately $1,942 on May 31, 2022, to about $994 on June 18, 2022. It recovered to levels exceeding $1,950 in August 2022, only to decline again to around $1,100 in November 2022 before surging to over $4,000 in December 2024.

• Ripple (XRP): XRP did not attract significant investor attention until the previous year. Over 2022 and 2023, its trading range was largely between $0.30 and $0.90. However, a substantial uptick occurred last year, with XRP rising from approximately $0.42 in July to over $3 by January of this year.

The cryptocurrency market faced a significant downturn in 2022, exacerbated by the collapse of FTX and the failure of the stablecoin TerraUSD, on top of a broader economic downturn and rising uncertainty. Increased regulatory scrutiny and evolving crypto regulations further compounded these challenges.

The notable surge in cryptocurrencies last year was largely attributed to Donald Trump’s victory in the U.S. presidential elections. This outcome generated widespread optimism that the incoming administration would adopt a more favorable stance toward digital currencies, sparking unprecedented investor interest.

Following the recent imposition of tariffs, investors have become more hesitant, reassessing their risk appetite for cryptocurrencies. Last week brought more bad news for the crypto industry as leading exchange ByBit announced a theft of $1.5 billion, making it the largest in the industry’s history.

After the recent pullback, the question remains whether these major cryptocurrencies will rebound. We anticipate that Bitcoin will likely follow broader economic trends with a positive bias, especially given expectations under the Trump administration that the establishment of a strategic Bitcoin reserve could bolster its price growth.

In contrast, XRP could be a real game changer. Since 2020, XRP has been engaged in a prolonged legal battle with the SEC over its classification as a financial security. Recently, the SEC dropped its case against Coinbase – alleging that the exchange was operating illegally as a securities exchange, broker, and clearing agency in the U.S. This may raise hopes among XRP investors for a similar outcome for Ripple. Furthermore, the SEC has yet to approve spot ETFs for XRP. If these ETFs are approved, they are expected to fuel a rally in XRP by enhancing its market legitimacy, making it more accessible to institutional investors, and facilitating retail participation.

It is important to note that cryptocurrencies represent high-risk assets, and the potential for price appreciation is contingent upon the realization of these outcomes, thus rendering such investments speculative in nature. Not too happy about the volatile nature of cryptocurrencies? Consider the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, which has a track record of comfortably outperforming the S&P 500 over the last four-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

[1] Returns as of 2/25/2025
[2] Cumulative total returns since the end of 2016 | XRP returns are calculated from the end of 2017

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1. A Look at the Ukrainian Minerals That Trump Wants, Ian Lovett, Feb 21, 2025, The Wall Street Journal [↩]
2. Putin says Europe is needed in Ukraine talks, but suggests deal still distant, Feb 25, 2025, Reuters [↩]