XRP News Today: XRP Slumps as Tariff Shock Hits Risk Markets; BTC Visits $91K

US Tariffs Overshadow SEC Appeal Optimism

On Friday, January 31, US President Donald Trump announced 25% tariffs on Canada and Mexico. Additionally, the Trump administration rolled out 10% import duties on Chinese goods.

The potential for an all-out trade war with its key trading partners could drive US import prices higher. Rising import prices may fuel inflationary pressures, potentially delaying Fed rate cuts. Higher borrowing costs would weaken demand for riskier assets such as XRP and bitcoin (BTC).

The tariff news overshadowed increasing optimism that the SEC might drop its appeal in the ongoing Ripple case.

Market reaction to tariffs was swift, with XRP tumbling from a January 31 high of $3.1341 to a Monday, February 3 low of $2.1809.

SEC Silence on Ripple Case Challenges Market Optimism

The SEC has remained silent on its plans to pursue its appeal against the Programmatic Sales of XRP ruling since Gary Gensler stepped down as SEC Chair. Despite hopes for a withdrawal, the uncertainty has pressured XRP, which has retraced from its January 16 high of $3.3999.

However, the possibility of a withdrawal remains. The upcoming closed SEC meeting on February 6 provides another opportunity for Acting Chair Mark Uyeda and Commissioner Hester Peirce to discuss a potential course of action.

Some former SEC officials and legal experts believe Paul Atkins, if confirmed as SEC Chair, may reverse course on the agency’s crypto enforcement cases. This aligns with Uyeda’s stance on non-fraud crypto cases, raising the chances of a withdrawal as Atkins undergoes the confirmation process.

XRP Price Trends: Appeal Optimism Remains Crucial

On Sunday, February 2, XRP tumbled 10.46%, following Saturday’s 5.15% slide, closing at $2.5783. Significantly, XRP underperformed the broader market, which dropped by 4.66% to a total crypto market cap of $3.19 trillion. The SEC’s continued silence left XRP with heavier losses.

The SEC’s decision on its appeal will be a key driver of XRP’s price action:

• A withdrawal could push XRP past its all-time high of $3.5505.
• If the SEC proceeds with the appeal, XRP could drop below $1.50.

Expert Analysis: How will the SEC’s next move shape XRP’s future? Read more here.

Bitcoin Slides Below $95K as Trade War Alarm Bells Ring

While the SEC considers its appeal, bitcoin also stumbled in early February. The US tariff announcement sent shockwaves through risk markets, triggering a sell-off in BTC. Significantly, BTC fell from a January 31 high of $106,105 to a Monday, February 3 low of $91,282.

Supply-Demand Balance Tilting the Wrong Way

The broader market’s reaction to US tariffs suggests BTC could face intensified selling pressure if US BTC-spot ETFs begin reporting sizeable outflows.

On January 31, the US BTC-spot ETF market reported net inflows of $318.6 million, contributing to weekly inflows of $559.5 million. While recent trends have supported BTC demand, sustained outflows could weaken investor confidence and question the viability of a US Strategic Bitcoin Reserve (SBR).

In late 2024, Senator Cynthia Lummis, Chair of the Senate Banking Subcommittee on Digital Assets, introduced the Bitcoin Act. Senator Lummis proposed the US government acquire one million BTC over five years, with a mandatory holding period of 20 years.

Congress, the Federal Reserve, the Treasury Department, and the President must approve a strategic reserve asset.

BTC’s recent price sensitivity to Fed monetary policy and government actions underscores its vulnerability to macroeconomic events.

Bitcoin Price Outlook

On February 2, BTC declined by 3.13%, following Saturday’s 1.54% loss, closing at $97,882.

BTC’s near-term trajectory depends on multiple factors, including Trump’s policies, the Fed rate path, and US BTC-spot ETF flows.

• Escalating trade tensions, a higher-for-longer Fed rate path, and stalled progress toward an SBR could impact BTC-spot ETF and BTC demand. Under this scenario, BTC may drop below $90k.
• Easing fears of retaliatory tariffs, a less hawkish Fed rate path, and increased political support for an SBR could drive BTC toward its record high of $109,312.

Market Outlook: Regulatory Developments in Focus

Despite the tariff impact, decisions on the SEC’s appeal and a potential US Bitcoin reserve could influence institutional adoption and investor sentiment.

Stay updated with our expert analysis of these developments and their implications for crypto markets. Explore the full analysis here.