A potential game-changer for XRP and the crypto world is on the horizon, but it’s not all good news. The fate of XRP hangs in the balance as reclassification fears loom.
Let’s dive into the recent events that have shaken the market and explore the controversial decisions that could shape XRP’s future.
The US Government Shutdown and Trade Wars: A Double Whammy
The US government shutdown, lasting from October 1 to November 13, created uncertainty. Add to that Trump’s threat to hike tariffs on Chinese shipments, and you have a recipe for market turmoil. These events, coupled with a hawkish Fed Chair Powell press conference, dampened hopes for a December Fed rate cut.
XRP’s Rebound: A Glimmer of Hope?
On November 21, markets saw a glimmer of hope as bets on a December Fed rate cut revived, causing XRP to rebound to $1.95. NY Fed President John Williams increased the chances of this cut, offering a potential boost to XRP. However, the token remains in the red for November, down 22%, despite positive developments like the US government reopening and trade truce.
The Liquidity Shock: A Lingering Effect
Tom Lee, Chief Investment Officer at FundStrat Capital, shed light on the October 10 flash crash. He explained that the deleverage event was historic, and its ripple effects are still being felt weeks later. This suggests a prolonged recovery period.
MSCI’s Consultation: A Potential Game-Changer
The market capitulation on November 21 was attributed to MSCI’s consultation on reclassifying digital asset treasury companies (DATs) as funds. This classification could have severe consequences for Bitcoin and, by extension, the entire crypto market. XRP’s close correlation with BTC makes it vulnerable to such news.
Michael Saylor’s Response: A Defense of Strategy
Michael Saylor, founder of Strategy, reacted strongly to the DAT classification issue. He emphasized that Strategy is an operating company with a unique treasury strategy, not a passive fund or trust. Saylor’s response highlights the potential impact of MSCI’s decision on companies like his.
The Kobeissi Letter: Shedding Light on the Issue
The Kobeissi Letter reported on Saylor’s response, noting that MSCI views DATs as more similar to investment funds. This classification could lead to the exclusion of companies like Strategy from flagship equity benchmarks, which would be a significant market mover. MSTR, for instance, has already seen a 70% drop from its high.
The MSCI Consultation Paper: A Flash Crash Trigger
Crypto commentator Ran Neuner shared a screenshot of the MSCI consultation paper, dated October 10. Notably, XRP’s price took a hit within 30 minutes of the paper’s release, dropping to $0.7773 before recovering briefly. This event highlights the immediate impact of such consultations on the crypto market.
The January 15, 2026 Decision: A Defining Moment
The decision on whether DATs holding over 50% of crypto assets should remain in major stock indices or be reclassified as funds is due on January 15, 2026. This date could be a pivotal moment for XRP, especially with no blue-chip listed firms holding XRP as treasury reserve assets.
Broader Market Implications: XRP’s Decoupling?
The delisting of DATs from major indices could impact BTC demand. However, robust inflows into XRP-spot ETFs and crypto-friendly legislation could provide a boost to XRP. These scenarios might lead to XRP decoupling from BTC, a controversial and intriguing possibility.
And here’s the part most people miss: the potential reclassification of DATs could have far-reaching consequences for the crypto market. It’s a complex issue with high stakes. What do you think? Should DATs be reclassified as funds? The crypto community is divided, and we’d love to hear your thoughts in the comments!