Why XRP Is Sinking Today

• XRP and other top cryptocurrencies are getting hit with sell-offs in relation to inflation news today.

• The July Producer Price Index (PPI) arrived with a much higher level of inflation than anticipated.

• Higher inflation could make it far less likely that the Federal Reserve will cut interest rates next month.

• 10 stocks we like better than XRP ›

XRP (CRYPTO: XRP) is seeing substantial sell-offs in Thursday’s trading in response to macroeconomic news. The cryptocurrency’s token price was down 5.3% over the past 24 hours of trading as of 3:40 p.m. ET. Over the same period, Bitcoin had fallen 3.3% and Ethereum was down 3.3%.

XRP is falling today after the latest round of inflation data has caused investors to become less optimistic about the outlook for interest rate cuts this year. The Producer Price Index (PPI) showed a much higher inflation level than had been anticipated, and the report is causing valuation pullbacks for cryptocurrencies and stocks.

The Bureau of Labor Statistics (BLS) published its PPI report for July this morning, and the results have caused a significant uptick in bearish sentiment across the crypto market. The report showed that PPI inflation came in at 3.7% in July — far higher than the 3% level called for by the average economist estimate. PPI inflation was up from 2.6% in June, and the 0.9% sequential monthly increase marked the biggest jump in over three years.

The new inflation data has raised concerns about the impacts of tariffs filtering through the economy and may make it significantly less likely that the Federal Reserve will issue an interest rate cut at its September meeting. If the anticipated rate cut doesn’t arrive, that could hurt the bull case for XRP and other cryptocurrencies.

Crypto investors have been eagerly awaiting interest rate cuts, and XRP and other leading tokens have already seen big gains this year in conjunction with expectations that cuts are on the near horizon. The July PPI data highlights the possibility that the inflationary impact of tariffs is still just starting to move through layers of the economy and that pricing increases could be poised to accelerate in the near term. Inflation trends and the interest rate outlook will likely continue to be among the most important pricing catalysts for XRP throughout the rest of the year.

Before you buy stock in XRP, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.