XRP and Bitcoin prices decline due to concerns over monetary policy changes
14th January 2025 – (New York) Early on Monday, cryptocurrencies including XRP and Bitcoin experienced declines as fears mounted that the monetary easing cycle may not proceed at the anticipated pace this year. According to reports from Barrons, Bitcoin, the world’s largest digital currency, fell 3.5% over the past 24 hours, trading at approximately $91,881.
XRP, another prominent cryptocurrency used for transactions on Ripple’s payment platform, dropped 3.4% to $2.44. This decline follows a weekend surge that saw XRP reach $2.60, potentially linked to expected developments from the Securities and Exchange Commission (SEC). The SEC has been embroiled in a legal battle with Ripple since 2020, alleging that the sale of XRP constituted the sale of an unregistered security. In August 2024, a court ruled that Ripple would pay a $125 million fine, significantly less than the $2 billion initially sought by the regulator. Ripple CEO Brad Garlinghouse hailed the ruling as a victory for the company.
The SEC appealed the decision in October, with a deadline of January 15 to present arguments in support of its appeal. The recent downturn in cryptocurrency prices was exacerbated by a stronger-than-expected U.S. jobs report, which heightened investor fears that the Federal Reserve may maintain elevated interest rates for an extended period. Analysts from Bank of America noted that the “cutting cycle is over,” reflecting a more cautious outlook following the December jobs figures.
The upcoming Federal Open Market Committee (FOMC) meeting, scheduled for January 28-29, is expected to see the central bank hold interest rates steady, with the CME FedWatch tool indicating a roughly 33% chance of no rate cuts this year. Conversely, Goldman Sachs adjusted its forecast on Saturday, now anticipating two rate cuts in 2025 and one in 2026, down from three cuts previously expected.
While cryptocurrency investors have responded positively to president-elect Donald Trump’s pro-crypto stance, concerns linger that potential tariffs could inflate prices and hinder the Fed’s ability to lower interest rates swiftly. Nevertheless, Goldman Sachs analysts, led by Jan Hatzius, argue that the implications of the new administration’s policies for interest rates may not be as decisively hawkish as some assume.
Among other cryptocurrencies, Ether saw a significant drop of 7.8% in the past 24 hours, while Solana and Dogecoin fell by 8% and 5.3%, respectively.
