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The crypto token XRP (CRYPTO: XRP) is rebounding on Wednesday, gaining 12% as of 2:30 p.m. ET. The jump comes as the broader market shot up: The S&P 500 and Nasdaq Composite gained a whopping 8.6% and 10.9%, respectively. XRP jumped after President Donald Trump announced a 90-day reduction of all tariffs, with the notable exception of China.
A critical pause
The president pressed the pause button once again, this time reducing levies on goods from all trading partners -- save for China -- to 10% for 90 days. The dramatic reduction of Trump's "Liberation Day" tariffs sent markets flying higher. Chinese goods flowing into the U.S. will now be subject to a 125% tariff. President Trump says his decision is "based on the lack of respect that China has shown to the World's Markets."
The administration says Trump will work in "bespoke" negotiations with each trading partner to reach a permanent resolution in the next 90 days. The tariffs had caused major pain in the market, especially for higher-risk assets like XRP and other cryptocurrencies. It was unclear whether the tariffs would be in place long term or used as leverage in negotiations. Today's news makes the latter seem like a reality, relieving investor fears.
In a world of meme coins, XRP provides real, tangible value. Despite this and the positive trade news, however, XRP remains overvalued in my view. Its current market capitalization of $120 billion is divorced from the actual value it provides.
Should you invest $1,000 in XRP right now?
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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.
Why XRP (Ripple) Is Skyrocketing Today was originally published by The Motley Fool