XRP Sinks 5% to Lead Crypto Losses as Strong Dollar Rattles Bitcoin Bulls
A stronger dollar historically tends to make dollar-denominated assets like bitcoin and gold expensive, leading to weakened demand in the short term.
XRP led crypto losses on the second-last day of this year as a stronger dollar weighed down global currencies and assets including bitcoin, with Asian equity markets sliding lower on Monday.
XRP sunk more than 5% in the past 24 hours, with dogecoin (DOGE), Solana’s SOL, ether (ETH) and BNB falling as much as 2%. Overall market capitalization fell 3%, while the broad-based CoinDesk 20 (CD20), an index tracking the largest tokens, minus stablecoins, shed 3.5%.
Some, however, remain optimistic about long-term crypto policies helping bump the market despite the lack of rate cuts or a strong dollar.
Unlike what many believe, Bitcoin and altcoins have not hit their price tops despite the ongoing consolidation fueled by the interest rate cut last week,” Maksym Sakharov, co-founder of WeFi, told CoinDesk in a Telegram message. “The selloffs recorded stem from the knee-jerk reaction by the market to uncertainties associated with macroeconomic policies. The Fed is preparing for higher figures next year despite inflation close to the 2% annual benchmark. This might shift the direction of monetary policy and impact the market.
But when US President-elect Donald Trump takes office in the coming year, more corporate firms will enter the Bitcoin ecosystem as the regulations become favorable. If these projections play out, the price of Bitcoin may also decouple from macroeconomic factors that generally trigger its intense volatility,” Sakharov added.
