XRP Leads Crypto Market Decline with 5% Loss Amid Strong Dollar
As 2024 approaches its end, the crypto market has experienced significant losses, with XRP leading with a drop of over 5% in the past 24 hours. The overall market capitalization has decreased by 3%, influenced by a stronger US dollar impacting Bitcoin (BTC) and other digital assets.
Other major tokens such as Dogecoin, Solana, Ether, and BNB have also recorded losses, although BNB showed signs of recovery after initially declining by 2%.
XRP and Entire Crypto Market Suffers amid Year-End Uncertainty and Dollar Strength
The primary factor for the current downturn is the strength of the US dollar, particularly as President-elect Donald Trump prepares to take office in late January. The US Dollar Index (DXY) indicates a historical inverse relationship with Bitcoin and cryptocurrencies; a stronger dollar leads investors to prefer traditional investments like stocks and US Treasuries over riskier assets such as cryptocurrencies.
Investor caution is heightened across financial markets as the year concludes, contributing to declines in US equities and reversals in Asian equity markets, along with anticipated losses indicated in futures contracts for the S&P 500 and Nasdaq.
Additionally, reduced expectations for further Federal Reserve interest rate cuts have led to declines in Bitcoin and other cryptocurrencies over the past month. December has not followed the typical “Santa rally” pattern; rather, Bitcoin has dropped nearly 4% this month despite a 47% gain in the last quarter of 2024, according to CoinGlass data.
Mixed Outlook for Crypto in 2025
Despite the negative market conditions, some experts maintain an optimistic outlook. WeFi co-founder Maksym Sakharov believes the long-term potential of cryptocurrencies remains strong. He views recent selloffs as impulsive reactions to uncertainties that are likely short-lived and not indicative of the end of a crypto rally.
Sakharov emphasizes expectations surrounding the Trump administration's policies, which he believes could benefit the crypto industry and attract institutional investors, enhancing visibility for cryptocurrencies overall.