After a market-wide bearish momentum, XRP investors are focusing on macroeconomic triggers like tariffs and rate cuts.
On April 9, 2025, President Donald Trump declared a 90-day suspension of most newly introduced tariffs, cutting them to 10% for more than 75 countries that had not retaliated.
In contrast, tariffs on Chinese imports were sharply raised to 125%, citing ongoing retaliation and a perceived lack of cooperation from China. This policy adjustment led to an immediate boost in financial markets, with the S&P 500 climbing 9.5%.
The crypto market also reacted positively. Bitcoin soared past $80,000, gaining 6% in value shortly after the announcement. XRP jumped 13%, trading above the $2.00 mark—an increase amplified by the debut of the XXRP ETF on the New York Stock Exchange. These events highlight how both traditional and digital markets remain highly responsive to global trade developments and geopolitical shifts.
Now, the XRP community sees a bullish prospect for XRP with the U.S. Federal Reserve’s upcoming interest rate decisions. Community analysts suggest these cuts could serve as the next major catalyst for crypto assets like XRP.
Fed’s Liquidity Injection and Potential Crypto Reaction
Industry pundits have noted that rate cuts are more than just monetary policy adjustments; they’re injections of liquidity that could positively impact risk assets.
According to XRP community figure “All Things XRP,” every time the Fed eases policy, capital becomes more accessible. That environment typically favors high-risk, high-reward investments, such as cryptocurrencies.
Historically, crypto has responded strongly to rate cuts. Notable examples include 2019, when three Fed rate cuts saw Bitcoin rise from $3,700 to $7,000. Similarly, in 2020, when rates were near zero, a major rally occurred, with Bitcoin jumping from $7,000 to $28,000.
This momentum in Bitcoin often spills over into the broader altcoin market, where tokens like XRP lead and sometimes outperform Bitcoin.
Essentially, as liquidity increases, crypto becomes more attractive compared to lower-yield alternatives like Treasuries or savings accounts.
However, not all rate cuts have been bullish for the crypto market. For instance, in September 2024, a 50 bps cut drove a 4% rise in Bitcoin. Meanwhile, in December 2024, a smaller 25 bps cut failed to excite markets, with Bitcoin dropping 4%.
These outcomes suggest that context matters. When rate cuts are perceived as a response to economic strength, markets rally. However, when cuts signal deeper concerns, such as an impending recession, investors may remain cautious.
“It is not just the cut but the story behind it. If market participants smell a recession, they pull back,” remarked All Things XRP.
Highlights of previous rat cut impacts
XRP Outlook Amid Fed Rate Cut Talks
Notably, many in the financial world are urging the Fed to implement more rate cuts in 2025. Interestingly, President Donald Trump himself is leading the calls, and crypto enthusiasts see this as bullish for Bitcoin and other crypto assets. Despite these calls, skepticism abounds regarding whether the Fed will yield.
However, if a positive outlook materializes, XRP and the broader market could see renewed momentum.
Ultimately, a rate cut alone does not guarantee a crypto surge. But if the macro backdrop supports a “risk-on” sentiment, the market may benefit from a strong liquidity tailwind.
