XRP Needs a Bigger Recovery Leap Than Bitcoin

The Bitcoin price is down 7% this year and XRP's price has dropped even further, by 21%. As a result, XRP needs to make up more ground to recover its losses against Bitcoin. According to recent data, Bitcoin's price began the year near $87,498 but now trades at around $81,275 due to high interest rates.

The Federal Reserve has kept short-term cash yields at 3.50% to 3.75% since December, making it less attractive for investors to put their money into assets that pay little or no interest. However, a growing money supply, which reached a record $23.22 trillion in July, has historically lifted Bitcoin's price due to its fixed supply.

XRP's price, on the other hand, is down 48% over the past year against Bitcoin's 27%. The Senate is set to vote on cloture for the CLARITY Act on September 15, which could decide whether XRP closes the gap with Bitcoin or falls further behind.

XRP has rallied 37% over the past month and 5% over the past week, but much of this gain is likely due to traders positioning themselves for a favorable cloture outcome. If the vote disappoints, these same traders may sell their XRP, leading to a significant loss in value.