XRP has fallen back toward the $1.30 level after a sharp reversal erased a large part of its recent recovery, bringing renewed attention to the token’s valuation at a time when macroeconomic and regulatory conditions have also become less supportive. The asset lost 7.3% on Tuesday and was trading around $1.30 in the figures cited, leaving it roughly 23% below its recent peak near $1.68 and down 29.18% since the beginning of 2026. The decline has coincided with criticism from Dubai-based crypto investor Royal Kane, who said XRP’s approximately $81.68 billion market capitalization was too large for him to consider buying at the current stage.
Kane’s argument is not built around a specific bearish price target. Instead, he questions whether an asset already carrying one of the larger valuations in the digital-asset market can still deliver the percentage gains available to smaller tokens with stronger emerging narratives. His comments arrive just as XRP faces tighter U.S. monetary policy, a failed Senate vote on federal crypto legislation and the unwinding of an August rally that had been supported by ETF inflows and increased activity on the XRP Ledger.
Royal Kane puts market capitalization at the center of the debate
Kane said he would not invest in XRP at its current valuation because its market capitalization is already too large. The figures included in the source placed XRP’s market value at about $81.68 billion, alongside approximately $4.12 billion in 24-hour trading volume. His concern is straightforward: the larger an asset becomes, the more additional capital is required to produce the same percentage increase that a much smaller cryptocurrency might achieve with less money entering the market.
Rather than arguing that XRP has no possibility of appreciating, Kane framed his position as a question of opportunity. He suggested that investors seeking outsized returns may prefer assets with lower starting valuations and narratives capable of attracting a new wave of capital. He referenced Solana’s earlier reputation as an “Ethereum killer,” the community-driven growth surrounding Pepe and Zcash’s adoption story as examples of themes that captured market attention. His recommendation was not tied to any particular token, but to the search for a compelling investment narrative over the coming years.
XRP has erased much of its latest rebound
The valuation discussion has become more relevant because XRP’s recent price action has weakened substantially. The token had climbed from around $1 in August to a monthly high close to $1.70, producing a 28.5% gain during the month. That move showed that buyers were still willing to support XRP when market conditions and demand improved. The reversal since then has been significant, with selling pressure pulling the price down from a recent high near $1.68 to approximately $1.30.
A decline between those two levels represents a drop of about 23%. XRP also fell 7.3% during Tuesday’s session and traded around $1.31 after the Senate’s failed crypto vote. The retreat has therefore unfolded alongside several changes in the external environment rather than in isolation. What appeared in August as a renewed attempt to establish a stronger price trend has now become a test of whether demand can absorb pressure from higher interest rates, weaker regulatory momentum and questions over how much upside remains available at the token’s current valuation.
August showed that institutional demand was still present
The latest decline follows a month in which institutional flows had supported the market. U.S. spot XRP exchange-traded funds attracted $153.55 million during August, with $150.28 million arriving during the final two weeks of the month. The concentration of flows near the end of August indicated that regulated investment products were contributing materially to demand during the rally.
Activity on the XRP Ledger also accelerated. Payment volume rose 521% in one week, with the increase attributed to larger transfers rather than to a simple rise in the number of transactions. That distinction suggests that bigger movements of value, rather than only greater transaction frequency, were behind the increase. These developments provided a stronger backdrop for XRP while it was advancing toward $1.70, but they have not prevented the subsequent correction.
Ripple’s escrow release did not stop the August advance
XRP’s August performance also occurred despite Ripple releasing 1 billion tokens from escrow on Sept. 1. The scheduled release was valued at approximately $1.38 billion at the time. Ripple has historically returned a substantial portion of its monthly allocation back into escrow, which limits the amount potentially entering circulation from each scheduled release.
The fact that XRP had gained 28.5% in August before the subsequent reversal illustrates that escrow activity was not the only factor determining price. Institutional inflows, market sentiment and network activity were also influencing demand. The current decline therefore cannot be reduced to a single token-supply event. It reflects a combination of valuation concerns, shifting macroeconomic conditions and renewed uncertainty surrounding U.S. digital-asset regulation.
Kane’s criticism of Ripple requires an important distinction
Kane also claimed that Ripple had “no products or revenue whatsoever,” but the source notes that this statement does not fully describe the company’s public commercial activities. Ripple is privately held and is therefore not required to publish the same quarterly financial statements as a publicly listed U.S. company. That leaves outside investors with less detailed information about its revenue than they would receive from an exchange-listed business.
At the same time, Ripple publicly operates several products and services. These include Ripple Payments, the RLUSD stablecoin and Ripple Prime, the institutional brokerage established after the acquisition of Hidden Road. Ripple has also announced custody and treasury services for corporate clients. The broader investment question is therefore not whether commercial products exist, but how investors should separate Ripple’s private business operations from the market value of XRP.
Buying XRP does not mean owning Ripple
That distinction is central to evaluating Kane’s valuation argument. XRP is the native asset of the XRP Ledger, while Ripple is a private technology company that holds a substantial quantity of XRP and develops products that may use the network. Purchasing XRP does not give the buyer equity ownership in Ripple, voting rights over the company or a claim on Ripple’s revenue.
XRP holders instead gain exposure to the market price of the token itself. That price can respond to liquidity, network usage, speculation, regulation and developments involving Ripple, but it does not represent a direct ownership stake in the company. As a result, comparing XRP’s market capitalization with Ripple’s commercial operations requires care. The token’s valuation and the company’s business performance can influence perceptions of one another without being the same financial asset.
Fed tightening has created a less favorable backdrop for risk assets
The market environment became more difficult on Sept. 16 when the Federal Reserve raised its benchmark interest rate by 25 basis points, moving the target range to 3.75% to 4%. The unanimous decision marked the first U.S. interest-rate increase since 2023. According to the source report, 12 of 18 officials projected additional increases during the year.
Higher rates can create pressure for cryptocurrencies because they increase the returns available from U.S. government debt and money-market products. Investors can obtain yield from those instruments without accepting the same volatility associated with digital assets. Crypto tokens do not provide a fixed return simply through ownership, so tighter financial conditions can reduce demand for more speculative positions and make high valuations more difficult to sustain.
Inflation had already prepared markets for the rate increase
The Fed’s decision followed inflation data that strengthened expectations for tighter policy. Annual inflation reached 3.4% in August, while consumer prices increased 0.4% from the previous month. Energy costs rose 2.1%, including a 3.9% increase in gasoline prices. Core consumer prices, which exclude food and energy, advanced 0.3% during the month, above the 0.2% estimate cited in the source.
Prediction-market traders increased the probability of a quarter-point rate increase to 81% after the inflation report. Those contracts are wagers rather than official Federal Reserve guidance, but they showed that a large share of market participants had already prepared for higher borrowing costs. Even so, the actual decision reinforced the broader shift toward tighter financial conditions that XRP and other cryptocurrencies must now navigate.
The CLARITY Act setback adds another layer of uncertainty
The macroeconomic pressure has been accompanied by a political setback for the crypto industry. On Sept. 15, the U.S. Senate rejected cloture on the Digital Asset Market CLARITY Act. The motion received 49 votes in favor and 50 against, leaving it 11 votes short of the 60 required to open formal debate.
The legislation was particularly relevant to XRP because it sought to divide oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The classification of network tokens under such a framework could affect how assets including XRP are treated in U.S. markets. With the measure failing to advance, the existing legal and regulatory framework remains in place.
A revised draft could have affected XRP’s treatment
Hours before the vote, Senate Republicans circulated a revised 635-page draft containing language on ancillary assets. The draft described an ancillary asset as a network token whose value depends on the managerial or entrepreneurial work of an originator or related party.
Under that language, XRP could have been treated as a digital commodity in secondary-market transactions regardless of the amount controlled by Ripple. The proposal never reached formal debate because the cloture motion failed. That means the potential treatment remained only part of a draft rather than becoming law or an operative regulatory standard.
The 2023 Ripple ruling still shapes XRP’s U.S. position
XRP continues to operate under the legal context created by the 2023 decision from U.S. District Judge Analisa Torres. The ruling found that Ripple’s programmatic XRP sales on public exchanges did not constitute securities transactions, while certain direct institutional sales violated securities law.
That distinction created different legal treatment depending on how the tokens were offered. The failed CLARITY Act vote means Congress has not yet replaced that existing framework with the broader federal market structure contemplated by the legislation. For XRP, this leaves regulatory questions open even though the 2023 ruling remains an important part of its U.S. legal position.
Legislative negotiations have not completely ended
The Senate setback does not necessarily close the legislative process. Seven Senate Democrats have reopened CLARITY Act discussions and said the rejected cloture motion was “not the end” of the effort. Any renewed attempt would still face a difficult mathematical hurdle. The official roll call showed 49 senators supporting advancement and 50 opposing it, meaning at least 11 additional votes would be required to reach the 60-vote cloture threshold.
For XRP, that means regulatory developments remain a potential future catalyst, but there is no confirmed legislative outcome to price in today. The market must instead operate under current rules while investors wait to see whether negotiations produce another Senate attempt.
XRP now faces a valuation test rather than a single bearish catalyst
The current decline is therefore the result of several forces converging at the same time. XRP has fallen 23% from its recent peak, the Federal Reserve has tightened policy, federal crypto legislation has stalled and Royal Kane has publicly questioned whether an $81.68 billion market capitalization leaves sufficient room for exceptional returns. None of those factors alone establishes where XRP will trade next.
The more important question is whether demand can return strongly enough to justify the existing valuation after the August rally has partially unwound. ETF inflows and the sharp increase in XRP Ledger payment volume showed that meaningful demand existed only weeks earlier. The current correction tests whether that support can survive a less favorable monetary and regulatory environment.
Kane’s comments add another dimension by shifting the discussion from whether XRP has a functioning ecosystem to whether its size already captures too much of the opportunity. That debate will not be resolved simply by one price movement. For now, XRP is caught between evidence of recent institutional and network demand and a market environment that has become materially more demanding for large digital assets.
