XRP dropped below $1.30 after falling 7.3% on Tuesday, extending a 23% slide from its recent high near $1.68. Dubai-based investor Royal Kane says he would not buy the token at its current $81 billion valuation, while a Federal Reserve rate hike and a stalled Senate crypto bill add further pressure.
XRP fell below $1.30 after losing 7.3% on Tuesday, and Dubai-based crypto investor Royal Kane has ruled out buying the token because of its $81 billion market value. Kane argues that XRP's large market capitalization leaves less room for the token to deliver the percentage gains available to smaller assets.
XRP price drops 23% from its recent peak
Selling pressure has erased much of XRP's rebound, pulling the price from a recent high near $1.68 to about $1.30 — a decline of about 23%. The retreat follows a stronger August, when the token climbed from around $1 to a monthly high near $1.70 and gained 28.5% even after Ripple released 1 billion tokens from escrow on Sep. 1.
U.S. spot XRP ETFs also attracted $153.55 million during August, including $150.28 million over the month's final two weeks. But price action has since reversed, and XRP traded around $1.31 after tighter monetary policy and another delay in federal crypto legislation weighed on sentiment.
Investor cites XRP's $81 billion valuation
At an estimated $81.68 billion, XRP's market capitalization remains one of the largest in digital assets, and Kane views that size as a limit on potential returns. He also argued that Ripple has no products or revenue. The company publicly operates Ripple Payments, the RLUSD stablecoin, and the Ripple Prime institutional brokerage formed after its acquisition of Hidden Road.
Buying XRP does not provide equity in Ripple or a claim on its revenue. XRP holders instead gain exposure to the token's market price, which can move on network activity, liquidity, and Ripple-related developments.
Fed hike and stalled CLARITY Act add pressure
On Sep. 16, the Federal Reserve raised its benchmark rate by 25 basis points, taking the target range to 3.75%-4% in its first increase since 2023. Twelve of eighteen officials projected additional increases during the year, and higher rates can pull demand toward yield-bearing alternatives and away from cryptocurrencies.
Regulatory uncertainty compounded the pressure a day earlier, when the Senate rejected cloture on the CLARITY Act by a 49-50 vote, falling 11 votes short of the 60 needed to open debate. The bill would have split crypto oversight between the SEC and CFTC and could have affected how XRP is classified, but seven Senate Democrats have since reopened talks on the measure.
Source: crypto.news
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