New Academic Research Explains Why XRP Still Moves With Traditional Markets During Crises

A new academic study is shedding light on why assets like XRP often fall or rise alongside traditional markets during crises instead of acting independently.

The research finds that, contrary to expectations, cryptocurrencies such as XRP remain largely influenced by traditional financial systems, especially during periods of global stress.

Notably, XRP community figure Eri called attention to the research in a post on X this week.

Key Points

• New research shows XRP moves with stocks and bonds during crises, not independently as many investors expect.
• Traditional markets still drive global finance, while XRP and other cryptocurrencies mostly react to their movements.
• During crises like COVID-19, market influence can shift quickly, making price behavior more volatile and unpredictable.
• As crypto integrates into global finance, XRP increasingly behaves like a risk asset tied to macroeconomic trends.

XRP Still Follows Traditional Markets

The study analyzed 70 financial time series across seven major asset classes, including cryptocurrencies, commodities, G10 stock indices, government bond yields, foreign exchange markets, credit default swaps (CDS), and technology stocks.

Using daily data from January 1, 2018, to March 24, 2026, the researchers found that traditional markets, particularly stock indices, bond yields, and CDS, remain the main drivers of global financial activity.

Cryptocurrencies, including Bitcoin and XRP, do not yet lead market direction. Instead, they mostly react to movements in traditional assets, especially during uncertain times.

This explains why XRP often drops when global stocks fall or reacts to macroeconomic events such as interest rate hikes or inflation fears.

Crises Change Everything Quickly

One key finding is that market relationships are not stable. During major global crises, the direction of influence between assets can shift quickly. The study highlights several major events to prove this point:

• The COVID-19 pandemic (2020–2021)
• The Russia–Ukraine conflict (from February 2022)
• Rising Middle East tensions (2026)

During these periods, the flow of information between markets changed significantly. For example, before COVID-19, stock markets mainly influenced other sectors. However, during the pandemic, some influence briefly shifted toward cryptocurrencies.

Data from the study shows that before COVID-19, crypto-to-stock influence was near zero (0.0003). During COVID-19, it turned slightly negative (–0.0008), indicating a shift in the direction of influence.

Why XRP Feels Unpredictable

The research shows that global financial markets are highly interconnected. Events such as inflation, wars, or energy crises create ripple effects across all asset classes, including crypto.

As a result, interest rates, credit risk, and global liquidity affect XRP’s price action. It also reacts to macroeconomic shocks, not just crypto-specific news. Meanwhile, its price behavior becomes more volatile during periods of global uncertainty.

The study also found that bond yields and CDS (credit risk indicators) are among the strongest drivers of market movements. These macro factors often influence stocks first, with crypto following afterward.

Crypto Now Fully Part of the Global Financial System

Another major takeaway is that crypto markets have become more integrated into the global financial system over time, especially after COVID-19.

This increased connection means crypto is no longer isolated. It behaves more like a risk asset, similar to stocks, and cross-market “spillover effects” are now stronger.

Notably, the researchers used advanced methods such as Transfer Entropy and Independent Component Analysis (ICA) to filter out noise and track how information moves between markets. After removing weak or random connections, the results revealed a clearer structure in which traditional finance still dominates.

In Summary

The study concludes that XRP and other cryptocurrencies are still in a follower phase rather than a leading one.

However, this relationship is dynamic. During crises, influence can shift, and crypto can briefly play a larger role. Still, traditional financial markets remain in the driver’s seat overall.

For investors, this means XRP’s price is not driven solely by crypto adoption. It is also closely tied to global economic conditions, policy decisions, and financial stress events.

Ultimately, as the financial system becomes more interconnected, XRP’s future movements may depend just as much on Wall Street and macro trends as on developments within the crypto space.