XRP has faced a nearly 5% drop in value over the past 24 hours, pushing its price closer to the $3 mark. This sharp decline follows a brief period in which XRP’s total market capitalization briefly surpassed that of Goldman Sachs, a significant milestone for the cryptocurrency. However, this success was short-lived, with XRP’s market cap falling by approximately $20 billion, aligning with the broader slump seen in the cryptocurrency market.
CME Futures Contract Denial Sparks Price Decline
The recent drop in XRP’s value is largely attributed to the Chicago Mercantile Exchange’s (CME) decision not to list futures contracts tied to XRP. Earlier this week, there were circulating screenshots suggesting the CME might launch futures contracts for XRP and Solana (SOL) on February 10. However, the CME clarified that these images were from “beta pages” mistakenly released from its testing environment and emphasized that no official decisions had been made regarding any futures listings.
This news has significantly impacted XRP’s price, as the CME is considered a key indicator of institutional involvement in the cryptocurrency space. The denial of futures listings is seen as a setback, especially given that the CME’s actions often influence institutional sentiment.
XRP’s Sensitivity to Market Conditions
XRP’s downturn is particularly notable compared to other major cryptocurrencies, reflecting the token’s heightened sensitivity to news and market dynamics. The absence of the CME’s approval for futures contracts adds uncertainty to XRP’s outlook, especially as the cryptocurrency market has been facing a broader slump.
Surge in XRP Prices in Late 2024
In the latter part of 2024, XRP experienced a surge in its price, driven by speculation about a more favorable regulatory environment under President-elect Donald Trump’s administration. Investors were optimistic about potential changes, including the establishment of a strategic Bitcoin reserve and the appointment of Paul Atkins, a pro-crypto figure, to head the U.S. Securities and Exchange Commission (SEC).
Atkins’ pro-crypto stance, particularly his involvement in Ripple’s ongoing legal battle over XRP sales, has been seen as a positive development for the cryptocurrency sector. The Trump administration’s crypto-friendly policies further bolstered investor confidence, leading to speculation that XRP may soon launch a spot exchange-traded fund (ETF).
Speculation on XRP’s Spot ETF
Ripple CEO Brad Garlinghouse has expressed optimism that the launch of an XRP spot ETF is “inevitable,” fueling further speculation in the market. Several firms, including Bitwise, Canary Capital, WisdomTree, and 21Shares, have already filed for such products. While the recent decline in XRP’s value is a setback, the continued push for regulatory clarity and the potential approval of an XRP spot ETF could reignite investor interest in the token.
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