Why Is XRP Price Falling After ETF Hype?

As the first XRP ETF hit the markets, prices have not gone according to the predictions of investors, sparking a wave of worry. XRP price hovers around the $1.81 mark as the hype around the XXRP ETF begins to wane.

XRP Price In Steep Decline Following ETF Launch

According to CoinMarketCap data, XRP price has taken a major hit following the launch of the first-ever XRP ETF in the markets. XRP tumbled by nearly 5% over 24 hours to trade at $1.81 despite the hype around the launch of an XRP ETF.

Teucrium Investment Advisors rolled out its leveraged XRP ETF, offering investors double the exposure to XRP. The leveraged ETF, with the ticker XXRP, failed to force a rally for XRP with several theories swirling for the decline in XRP price.

Odd ETF Douses Market Enthusiasm

The nature of the XRP ETF contributes to its lukewarm market reaction on launch day. The leverage ETF rolled out without the SEC’s approval of a spot ETF leaving market participants scratching their heads.

Bloomberg market analyst Eric Balchunas described the ETF as “very odd,” contributing to a tepid reception. Historically, spot-based ETFs have had seismic effects on prices, with Bitcoin and Ethereum spot ETFs triggering double-digit rallies.

Despite falling XRP prices, the approval of a spot-based ETF will trigger a strong rally for the asset compared to the leveraged offering.

Broader Market Selloff Is Impacting Prices

A glance at the cryptocurrency charts reveals a steep decline across the board for asset prices. Bitcoin price continues to trade well below the $80K mark while Ethereum has tumbled by nearly 6% over the last day.

The decline of the top two largest cryptocurrencies has dragged other altcoins underwater. XRP price is not the only one roiling under increased sell pressure, with ADA, SOL, and BNB facing bearish sentiments. The US-China trade war is stoking increased selling pressure for cryptocurrencies amid reciprocal tariffs.

Speculative Run-up For XRP

Another reason for the XRP price decline following the ETF launch is profit taking. Since reports of an imminent XRP ETF launch went mainstream, the asset experienced increased buying activity from investors.

There is speculation that the price decline is tied to traders “buying the rumor and selling the news.” This trading strategy leads to a correction in the face of positive fundamentals for an asset. Ripple’s acquisition of Hidden Road for $1.25 billion failed to trigger a reversal for the asset’s price.