As 2025 unfolded, the global cryptocurrency market started from an estimated valuation of approximately $3.5 trillion. Throughout the year, this collective market cap experienced volatility, culminating in a reduction to under $3 trillion as of now. This downturn has been particularly marked in some of the sector's more speculative digital assets.
Two tokens emblematic of this trend are XRP and Shiba Inu. XRP has seen a 20% decrease during 2025 and is currently 49% below its recent peak value. Shiba Inu's decline is even steeper, having fallen 67% during the same period and failing to reach a new high over the past four years.
Both cryptocurrencies are confronted with intrinsic challenges that could catalyze further steep declines, potentially exceeding 50%, throughout 2026.
XRP’s Structural Limitations Amid Regulatory and Market Pressures
XRP was developed by Ripple, a company that created Ripple Payments, a network designed to facilitate direct and immediate cross-border financial settlements between banking institutions. XRP functions as a bridge currency intended to standardize these transactions, helping banks avoid expensive foreign exchange conversions by swapping one currency, such as British pounds, for XRP when conducting transfers to foreign banks.
Among the total 100 billion XRP tokens, approximately 60.5 billion are currently in circulation, while Ripple retains 39.5 billion for controlled release aligned with institutional demand. The U.S. Securities and Exchange Commission (SEC) initiated legal action against Ripple in 2020, asserting that XRP should be classified as a security due to this release mechanism, analogous to stocks or bonds issued by corporations. This legal dispute placed significant pressure on XRP's market performance.
In August, following a change in administration policies favoring cryptocurrencies, the SEC withdrew its lawsuit and related appeals, thereby concluding a protracted legal battle dating back five years. This resolution propelled XRP to a level not seen in seven years.
Despite this positive legal development, XRP's fundamental challenges remain. One major limitation is that Ripple Payments does not mandate usage of XRP itself; financial institutions can opt to settle transactions in fiat currency. As a result, growth in Ripple Payments’ adoption does not necessarily translate to increased demand for XRP tokens.
Additionally, Ripple introduced its own stablecoin, RippleUSD, at the end of 2024. Stablecoins provide stable value and minimal price volatility, making them more favorable for transaction purposes compared to traditional cryptocurrencies like XRP, which experience frequent and significant price swings.
With demand for XRP largely disconnected from transactional use and supplemented by speculative investor interest, the token's valuation is vulnerable to market sentiment swings. Historically, following its previous all-time high in 2018, XRP's value plummeted by more than 90% within a year.
Currently down 49% from its most recent peak, XRP could face a similar trajectory if these structural issues persist, indicating a further potential price erosion of at least 50% in 2026.
Shiba Inu’s Shrinking Market Presence and Overwhelming Token Supply
Introduced in 2020 by the pseudonymous creator Ryoshi, Shiba Inu was conceived as a meme token inspired by the earlier success of Dogecoin. The token achieved extraordinary gains in 2021, including an astronomical 45,278,000% return at one point, which turned a nominal $3 investment into a theoretical $1 million.
However, meme tokens characteristically lack intrinsic utility, so when investor enthusiasm fades, their value typically suffers steep declines. Shiba Inu followed this pattern, dropping more than 90% by mid-2022.
Sustainable value growth for a cryptocurrency usually hinges on increasing adoption as a payment method or store of value. Yet, Shiba Inu’s real-world use remains limited, with only approximately 1,112 merchants globally accepting it as payment, as reported by the crypto directory Cryptwerk.
The token also suffers a serious supply issue, with a circulation exceeding 589 trillion units. At its current price near $0.000007, this equates to a market cap around $4.2 billion. However, a meaningful price increase toward $1 per token would inflate the market capitalization to an unrealistic $589 trillion, far exceeding the value of any existing asset worldwide.
This structural imbalance curtails speculation and investor interest, contributing to a sustained negative price trend. Reflecting these pressures, Shiba Inu lost over 60% of its value in 2025 and is forecasted to decline another 50% or more in 2026.
Concluding Observations
Despite momentary legal and market boosts, XRP’s underlying economic incentives are insufficient to drive sustained price appreciation. The token’s detachment from Ripple Payments’ utility and competition from RippleUSD’s stable value deliverables place downward pressure on long-term valuation.
Similarly, Shiba Inu’s lack of widespread merchant adoption combined with an overwhelmingly large circulating supply limits its potential for meaningful price gains. Without a viable use case or realistic growth avenues, Shiba Inu is unlikely to recover prior highs.
Considering these factors, investors should exercise caution as both tokens exhibit vulnerabilities that could precipitate major declines in 2026.