XRP Slips as Shutdown Fears Mount

Shutdown Risk Clouding Crypto Markets

XRP’s price dropped 2% to $1.90 this week, mirroring a broader crypto pullback as the specter of a U.S. government shutdown loomed. On January 25, XRP traded at $1.89, while Bitcoin hovered at $88,600—both reflecting the market’s anxiety as shutdown odds spiked to 73%, up sharply from just 8% earlier in the month. This surge in risk was fueled by political standoffs in Washington, with Senator Chuck Schumer warning of Democratic opposition to security funding bills after recent violence in Minneapolis.

The overall crypto market cap fell by 2% in the last 24 hours, now standing at $3.1 trillion. Notably, over 21,000 Bitcoin options contracts—worth nearly $2 billion—expired on January 23, adding volatility and pressure to digital asset prices across the board.

BitGo’s first day of trading ended just above its $18 IPO price, underscoring the cautious tone in crypto equities.

On paper, XRP’s resilience above $1.80 might seem encouraging, but the underlying sentiment remains fragile as traders brace for more political uncertainty.

Institutional Money Enters, XRP Lags

While institutional players continue to move into crypto markets, XRP has yet to see a corresponding boost. BlackRock’s spot Bitcoin ETF recorded a net outflow of $22.35 million on January 22, and U.S. spot Bitcoin ETFs saw total net outflows of over $32 million that day. Ethereum ETFs also posted net outflows approaching $42 million. These numbers highlight a cautious mood among large investors despite recent regulatory advances.

The Crypto Fear and Greed Index has now reached “extreme fear”—a signal that many market participants are retreating or hedging positions rather than adding risk.

Ripple CEO Brad Garlinghouse has said he expects new highs for crypto by 2026, citing growing regulatory clarity and institutional participation. Yet for now, XRP’s price action suggests traders are unconvinced that these tailwinds will materialize in the short term.

Cathie Wood Backs XRP in ETF Push

ARK Invest, led by Cathie Wood, has filed registration statements for two new index crypto ETFs that include XRP among their tracked assets. The ARK CoinDesk 20 Crypto ETF will follow the daily performance of an index featuring major tokens such as BTC, ETH, XRP, SOL, and ADA. This fund will be listed on NYSE Arca and invest primarily in regulated futures contracts rather than directly holding cryptocurrencies.

A second fund—the ARK CoinDesk 20 ex-Bitcoin Crypto ETF—will track the same index but exclude bitcoin-related assets and take both long and short positions using futures contracts.

IPO Buzz, but XRP Stays Muted

Elsewhere in the industry, Ledger is preparing for a potential $4 billion IPO with backing from Goldman Sachs and other major banks. In contrast to this fundraising momentum and BitGo’s stock market debut (which ended just above its $18 IPO price), XRP has remained subdued despite being included in high-profile investment products.

ZRO (+15%), AXS (+10%), and DASH (+8%) were among the top movers this week; by comparison, XRP’s modest decline stands out as evidence of its current lack of speculative fervor.

Regulatory Tailwinds, Yet XRP Dips

According to decrypt.co, PwC stated that institutional crypto adoption has crossed a point of no return as regulatory frameworks evolve toward more active supervision. BlackRock CEO Larry Fink also called for a unified blockchain infrastructure to support tokenization and reduce corruption risks—a vision that could eventually benefit assets like XRP.

Still, with macroeconomic headwinds such as potential U.S. government shutdowns and ETF outflows weighing on sentiment this week, it’s uncertain when or if these regulatory shifts will translate into sustained gains for XRP holders.

Signals to keep an eye on

If the odds of a US government shutdown, currently at 73% per Polymarket, materialize in the coming days, XRP's price—already down 2% to $1.90—could see immediate volatility tied to broader market risk-off moves.