The XRP (XRP -3.98%) cryptocurrency is falling in today’s trading. The crypto token price was down 6.6% over the last 24 hours of trading as of 6:15 p.m. ET. Meanwhile, Bitcoin was down 4%, and Ethereum was down 5.3%.
XRP is losing ground today in conjunction with a broader pullback for the crypto market. Investors are putting more weight behind potential macroeconomic risk factors and taking money off the table after a year of explosive gains.
Crypto investors are still digesting the latest Fed policy outlook
The crypto market has been highly volatile lately. Last Wednesday, the Federal Reserve announced a 25-basis-point cut for interest rates. The move was in line with investor expectations, but the central banking authority issued a cautious outlook for next year and sent equity and crypto markets tumbling. Instead of delivering the four quarter-point rate cuts previously forecasted, it now looks like only two cuts will arrive.
Cryptocurrencies and other speculative assets tend to perform much better when interest rates are low, and the new Fed outlook has caused some continued pivoting in crypto and stocks. With many tokens posting fantastic gains across 2024’s trading, some investors are treating the new interest rate outlook as a good time to take profits. While XRP is down 15% from its five-year high on recent pullbacks, it’s still up roughly 270% across 2024’s trading.
What comes next for XRP?
Investors are hoping that the upcoming change in U.S. presidential administration will deliver new bullish catalysts for XRP. In conjunction with the incoming Trump administration, Securities and Exchange Commission (SEC) chairman Gary Gensler is expected to step down. With a leadership change ahead, it’s possible that some lingering legal issues the SEC is pursuing against Ripple and XRP could be dropped.
President-elect Trump has also nominated former SEC commissioner Paul Atkins to the post. Atkins is broadly viewed as favorable to the crypto industry. In general, the incoming Trump administration looks set to offer unprecedented levels of support for the crypto space. However, investors should know that there’s a risk that macroeconomic pressures will outweigh benefits from otherwise bullish political and regulatory shifts.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.
