Throughout the past century, the stock market has always been seen as the channel that generates the most wealth for investors, surpassing bonds, commodities, and real estate. However, in the past decade, no traditional asset has been able to compare with the spectacular growth of the cryptocurrency market.

While the S&P 500 index (SNPINDEX: ^GSPC) has increased about 3 times in the last 10 years, the two popular cryptocurrencies, XRP and Dogecoin, have increased by more than 34,000% and nearly 117,000% respectively, according to data from YCharts. However, despite this impressive performance, both XRP and Dogecoin may be entering a difficult correction phase in August, potentially lasting until the end of 2025. Here are the main reasons:

1. The Actual Adoption Rate is Not as Expected

Despite being widely promoted as a faster, cheaper, and safer payment solution compared to traditional methods, the actual adoption rate of XRP and Dogecoin remains quite modest.

  • XRP is used as an intermediary currency in cross-border transactions through RippleNet. However, among the approximately 300 global financial institutions using RippleNet, not all use XRP in transactions. In other words, the level of RippleNet adoption does not equate to the corresponding demand for XRP.

  • Dogecoin received a significant boost when Elon Musk announced that Tesla would accept DOGE for the purchase of certain products. However, according to data from Cryptopolitan, only about 2,500 businesses accepted Dogecoin in 2024 – a very small number compared to traditional payment systems.

Although these blockchain networks may be cheaper and faster than SWIFT, in terms of popularity and global acceptance, they still cannot compete with traditional payment methods.

2. The Blockchain Networks are Not Really Outstanding

  • XRP Ledger can confirm and process transactions in 3–5 seconds at a cost of just a fraction of a cent.

  • Dogecoin has a processing time of about 1 minute and costs around $0.02.

However, competitors like Solana and Stellar are showing clear superiority:

  • Solana processes international transactions in about 400 milliseconds at a cost of less than a cent.

  • Stellar can also handle transactions on par with XRP and DOGE but is more popular in peer-to-peer transactions.

Therefore, in terms of speed, cost, and scalability, Dogecoin and XRP are gradually losing their competitive edge.

3. The “Buy the Rumor, Sell the News” Effect is Taking Hold

Both of these currencies are expected to rise sharply after Donald Trump's victory in November 2024:

  • The resignation of SEC Chairman Gary Gensler on January 20, 2025 (Trump's inauguration day) is expected to help Ripple resolve long-standing legal issues.

  • Elon Musk being invited to join the Government Efficiency Department (DOGE – sharing the name with Dogecoin) has made investors optimistic about DOGE's future, even though it has no direct relation to the token.

However, these supporting factors have now lost their influence. Musk no longer holds any government-related role, and Ripple's lawsuit has yet to achieve any major breakthroughs. As the 'good news' has already been reflected in the price beforehand, the trend of selling to take profits will emerge – this is a common phenomenon in financial markets: 'Buy the rumor, sell the news.'

4. The Cryptocurrency Market is Tied to the Overvalued Stock Market

Initially, cryptocurrencies were expected to be alternative assets that helped investors hedge against inflation and were independent of the stock market. However, the reality shows that the price volatility of digital currencies is increasingly synchronized with the stock market.

Data from Bespoke Investment Group shows that the bull market of the S&P 500 lasts an average of 1,011 days, about 3.5 times longer than the bear market. However, the current market is the third most expensive bull market in 154 years, according to the Shiller P/E valuation index. This increases the risk of a deep correction.

If the US stock market adjusts, it is highly likely that XRP and Dogecoin will also be heavily affected – and with even more volatility.

Conclusion: Caution is Necessary

XRP and Dogecoin have provided incredible returns in the past, but the current environment is not as favorable as before. From the limited actual adoption rates, fierce competition from new blockchains, to unfavorable macro factors from the stock market, all indicate significant risks for these two currencies in the remainder of 2025. Investors should consider carefully, avoid chasing short-term expectations, and always equip themselves with effective risk management strategies.