Why XRP (Ripple) Is Plummeting Today

The crypto token XRP (CRYPTO: XRP) is falling on Monday, dropping 10.3% since 4:30 p.m. ET on Sunday. The move comes as the S&P 500 (SNPINDEX: ^GSPC) lost 0.4% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) lost 0.6% in the day's trading.

XRP retreated after rallying more than 30% following President Trump's call for a "Crypto Strategic Reserve" on Sunday.

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A reserve could be a reality

President Trump took to Truth Social on Sunday to announce his intention to create a strategic reserve of five cryptocurrencies: Bitcoin, Ethereum, Cardano, Solana, and XRP. Although the president had signed an executive order (EO) soon after taking office with a similar intention, Sunday's post calls for a "reserve" rather than a "stockpile." The latter would involve simply holding on to digital assets already seized by federal law enforcement, while the former implies the federal government would purchase additional assets, infusing the market with capital.

Moreover, the latest post specifically mentions XRP, sending its price rocketing up on Sunday.

Many have doubts

After the initial rally, however, XRP has fallen today as doubts creep in around the likelihood of a reserve coming to fruition, especially for XRP and the other altcoins mentioned.

It didn't take long for critics from across the political spectrum to voice their concerns after the post went live. Some questioned whether it was prudent to invest tax dollars in volatile assets, especially when the national debt continues to grow. Others who are more generally favorable to the idea only want Bitcoin involved and balked at the idea of including XRP and other altcoins. Finally, large questions remain surrounding how exactly the reserve would be set up and if the president would need Congress to do so.

XRP fell today after these doubts helped curb investors' initial euphoria.

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.