XRP's Price Collapse: Co-founder Sell-Off or Market-Wide Downtrend?

The XRP price collapse in 2025 has sparked intense debate among investors and analysts: Is the decline driven by token-specific vulnerabilities, such as co-founder sell-offs, or is it a symptom of broader macroeconomic and crypto-market trends? This analysis dissects the interplay of these factors, drawing on recent data and expert insights to determine their relative influence.

Macro-Driven Pressures: A Systemic Crypto Winter

The cryptocurrency market's prolonged downturn in 2025 has been a primary driver of XRP's decline. According to a report by , the Federal Reserve's delayed interest rate reductions and balance sheet tapering have tightened liquidity conditions, deterring institutional and retail investors from allocating capital to speculative assets like crypto. This macroeconomic backdrop has triggered a $1.3 trillion loss in total crypto market capitalization since October 2025, with Bitcoin and Ethereum also experiencing declines, albeit less severe than XRP.

Technical indicators further underscore the bearish sentiment. XRP's daily chart confirmed a "death cross" pattern-where the 50-day moving average crossed below the 200-day moving average-signaling increased selling pressure and triggering further declines. Meanwhile, the broader market's risk-off behavior, fueled by geopolitical instability and declining ETF inflows, has exacerbated the downturn.

Token-Specific Vulnerabilities: Co-Founder Sell-Offs and Regulatory Uncertainty

While macroeconomic factors set the stage, token-specific issues have amplified XRP's volatility. Ripple co-founder Chris Larsen's large-scale sell-offs in 2025 have drawn significant scrutiny. Between July and October 2025, Larsen transferred nearly $300 million in XRP to centralized exchanges, including Coinbase and Binance, sparking fears of a market dump. Analysts note that Larsen's pattern of "cashing out near local highs" has historically influenced XRP's price trajectory, with his $764.2 million in realized profits since 2018 underscoring his outsized market influence.

Other co-founders, such as Jed McCaleb, have also played pivotal roles. McCaleb's 2014 decision to sell 9 billion XRP led to a 40% price drop, highlighting the sensitivity of the token to large-holder actions according to analysis. In 2025, McCaleb's continued ownership of 9 billion XRP-alongside Larsen's 2.5 billion-has raised concerns about supply centralization and its impact on price stability.

Regulatory uncertainty further compounds these challenges. Despite a partial legal victory in 2023, Ripple's ongoing dispute with the SEC has left key questions unresolved, deterring institutional investment during volatile periods. The fading optimism around an XRP Spot ETF approval has also contributed to downward pressure, as investors who had bought in anticipation of regulatory clarity have taken profits or exited positions according to reports.

Comparative Analysis: XRP vs. Broader Market Trends

To assess whether XRP's collapse is unique or part of a broader trend, its performance must be compared to Bitcoin, Ethereum, and traditional markets. In November 2025, XRP fell 16.1%, outpacing the S&P 500's 0.1% gain and the Nasdaq Composite's 1.5% decline. While Bitcoin and Ethereum also declined, their price movements were more closely tied to macroeconomic factors-such as the Fed's hawkish stance and tech stock volatility-rather than token-specific issues according to data.

This divergence suggests that XRP's decline is more pronounced due to its reliance on institutional adoption and regulatory clarity. For instance, the launch of the first U.S. spot XRP ETF (XRPC) initially boosted optimism, but inflows remain small relative to XRP's market cap, limiting its price impact. In contrast, Bitcoin's price is more influenced by global financial sentiment, including interest rates and tech sector performance according to market analysis.

Conclusion: A Confluence of Factors

XRP's 2025 price collapse is the result of a confluence of macroeconomic headwinds and token-specific vulnerabilities. While the broader crypto market's downturn-driven by liquidity constraints and risk-off sentiment-has created a challenging environment, XRP's unique exposure to co-founder sell-offs, regulatory uncertainty, and whale activity has exacerbated its decline.

Looking ahead, XRP's recovery will depend on both macroeconomic conditions and token-specific developments. Favorable regulatory outcomes, sustained institutional adoption, and technological advancements (such as the XRP Ledger's AMM integration) could drive long-term growth. However, until co-founder selling stabilizes and broader market conditions improve, XRP remains vulnerable to further downward pressure.