Key Insights
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Over the last three months, Bitcoin has dropped by 20%, while XRP has experienced a nearly 35% decline.
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Market uncertainty contributes to significant price fluctuations, underscoring the ongoing volatility of cryptocurrencies.
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Historically, Bitcoin and XRP have managed to recover from losses and even achieve new record highs.
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XRP (CRYPTO: XRP) and Bitcoin (CRYPTO: BTC) have both seen significant declines recently, with Bitcoin down over 20% and XRP nearly 35% in three months. Investors’ concerns largely depend on whether the downturn impacts their long-term investment strategies.
Causes of the Decline in XRP and Bitcoin
The primary reason for the decline in XRP and Bitcoin is diminishing confidence, leading to a widespread cryptocurrency sell-off. Market sentiment significantly affects crypto prices, and current investor anxiety is palpable. The Federal Reserve’s recent rate cuts did little to allay these concerns, and slow progress on crypto regulations also weighs heavily on market stability.
Additionally, the aftermath of the dramatic market crash on October 10 is still affecting prices. Around $19 billion in leveraged crypto positions were liquidated, taking away a significant portion of market liquidity and showcasing how heavily crypto trading relies on borrowing. While this event was initially labeled a flash crash with a temporary price rebound, it marked the start of a continuing downturn.
Investor Concerns
In many respects, the recent price drop aligns with the typical fluctuations of crypto investing. Historically, Bitcoin has consistently dropped after reaching new highs; following its record peak of $126,080 on October 6, it closed at $87,823 yesterday (December 28). Thus far, both Bitcoin and XRP have rebounded from price declines to reach new heights. However, watching your portfolio’s value diminish can be unsettling, and historical performance offers no guarantee for future results. Each cryptocurrency has its unique factors for long-term investors to consider.
Bitcoin Analysis
If you purchased Bitcoin envisioning it as a transformative digital currency for the internet, that outlook remains valid. Although increased use of stablecoins might pose a challenge, Bitcoin still holds considerable potential. Despite a slight dip in institutional demand, over $115 billion remains in spot Bitcoin ETFs.
XRP Evaluation
XRP currently shows promise, with five spot XRP ETFs boasting over $1 billion in assets, indicating institutional backing even amid price downturns. The launch of the XRP Ledger’s Ethereum Virtual Machine (EVM) has also seen some success since its summer introduction. However, a significant part of XRP’s previous growth stemmed from speculation around the conclusion of its SEC legal battles. While the end of the lawsuit in August 2025 did not alleviate downward trends, new developments such as the introduction of spot XRP ETFs have yet to reverse the trend.
Consider the Bigger Picture
In any investment scenario, long-term performance expectations outweigh short-term price slumps. It’s essential to differentiate between Bitcoin and XRP when determining your investment thesis and whether the recent downturn has influenced your perspective.
Is It Time to Invest in Bitcoin?
Before making a decision about investing in Bitcoin, it’s important to note that the Motley Fool Stock Advisor analyst team has designated their top 10 best stocks for current investments—Bitcoin was not included. The selected stocks could offer significant returns in the coming years. For instance, an investment in Netflix when it was listed on December 17, 2004, would be worth $505,749 today, and Nvidia would yield $1,149,658 from a $1,000 investment as of April 15, 2005.
