XRP (XRP -5.39%) is getting hit with another round of sell-offs Tuesday. The cryptocurrency is down 4.1% over the previous 24 hours of trading as of 1:30 p.m. ET -- a stretch that also saw Bitcoin fall 2.8% and Ethereum sink 4.3%.
The cryptocurrency market is under pressure today, and Home Depot's latest quarterly report stands out as the most likely catalyst for valuation pullbacks in the space. Despite some significant valuation contraction after a record high last month, XRP is still up roughly 49% year to date as of this writing.
Image source: Getty Images.
Home Depot's latest quarterly update could signal trouble for XRP
With the second-quarter earnings release and conference call that it hosted this morning, Home Depot said that it would be raising prices on some of the goods sold in its stores as a result of pricing pressures from tariffs. Investors seem to be interpreting this statement from the company as a sign that the consumer side of the U.S. economy could soon begin to see accelerating inflation. If that proves to be the case, it could significantly weaken bullish momentum for XRP and other cryptocurrencies.
Could inflationary pressures sink XRP?
Valuations for XRP and other cryptocurrencies are heavily influenced by the broader macroeconomic backdrop. Home Depot is one of the U.S.'s largest and most important retailers. It's also the biggest player in the home-improvement space, which is often looked to as a bellwether for the real estate market and broader economy. As as result, the company's quarterly results and guidance are often given significant weight as indicators when it comes to valuation trends for stocks and other assets.
Home Depot's announcement that it plans to raise prices in response to tariffs follows a Producer Price Index report from the Bureau of Labor Statistics last week that showed levels of inflation far higher than economists had anticipated. The home-improvement retailer's comments seem to be heightening fears that higher inflation will soon be seen in the U.S. consumer economy. Higher inflation could cause the Federal Reserve to take a far more cautious approach to cutting interest rates, which would likely be a bearish catalyst for XRP and other cryptocurrencies.
