The price of Ripple’s cryptocurrency, XRP, has plunged 27% from $3.07 to $2.23 over the last seven days. This can be attributed to a broader decline in cryptocurrencies following tariffs imposed by President Trump on Canada, Mexico, and China. Elevated tariff rates would reduce access to lower-priced goods – pushing consumer costs higher. Such inflationary effects could lead the U.S. Federal Reserve to become more hesitant about cutting interest rates in the current year.
The recent slide in XRP comes after an impressive period of 600% growth between November 2024 and January 2025 and looks like a minor setback given XRP’s encouraging prospects. The cryptocurrency’s previous rally was fueled by Trump’s presidential election victory, which generated optimism about more accommodative crypto policies. Positive momentum in its legal disputes further supported the asset’s outstanding performance. Our take on XRP – Up 300% In A Month, XRP Is Just Getting Warmed Up – has more details.
The outlook for XRP includes pending regulatory decisions from the SEC. A potential approval of Ripple’s ETF this year could serve as a significant catalyst for XRP’s price appreciation. Our previous note on XRP – What’s The Next Trigger For XRP Price? – has more details on this.
Looking at the recent development around tariffs, it has clearly put investors on edge, and they are trying to move away from risky assets. An important thing to keep in mind is that cryptocurrencies trade 24 hours a day, 7 days a week – making it the first market to face the reaction to tariffs imposed over the weekend. S&P500 futures point towards a 2% cut on Monday, February 3.
Although XRP is facing a correction now, the changes for this cryptocurrency over the recent years have been far from consistent, with annual returns being considerably more volatile than the S&P 500. Returns for XRP were 278% in 2021, -58% in 2022, 81% in 2023, and 234% in 2024.
In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, is considerably less volatile. And it has comfortably outperformed 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.
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