What Happens to Ether and XRP If Bitcoin Crashes?

A sharp Bitcoin selloff could drag Ether and XRP down with it, as tight market correlations and fading liquidity often turn crypto into one big trade when fear takes over.

Bitcoin’s dominance has always defined the rhythm of crypto markets. But what if that dominance breaks or worse, if Bitcoin crashes? For Ethereum (ETH-USD) and XRP (XRP-USD), the answer could decide how much independence from Bitcoin the broader digital-asset world really has.

Bitcoin Has a Firm Grip on the Market

When Bitcoin drops, the rest of crypto usually follows. That isn’t just market folklore — it’s math. During major selloffs, correlations between BTC, ETH, and XRP tend to tighten sharply. After the Oct. 10 tariff shock, for example, CoinMetrics data showed BTC-ETH correlation rising to 0.73 and BTC-XRP to 0.77. In simple terms, when Bitcoin sneezes, everything else catches a cold.

That’s because Bitcoin remains the market’s “anchor asset.” It defines sentiment, liquidity, and structure across exchanges. When BTC’s price weakens, margin calls cascade, liquidity dries up, and investors rush to safety. Even fundamentally strong tokens like Ether and XRP get pulled lower, not because of utility, but because the entire market trades as one risk basket.

How ETH and XRP Might React

If Bitcoin were to plunge 50%, ETH would likely fall even harder based on its historical beta to BTC, which often exceeds 1.0. Ethereum’s staking and application ecosystem can help it recover faster, but it’s unlikely to avoid the initial shock.

XRP, which carries higher regulatory risk and less organic yield than Ether, may face a steeper decline. Its price tends to move with broader market sentiment, not utility metrics, during periods of stress. History shows that during crises like the FTX collapse or Terra’s failure, Bitcoin-led selloffs erase distinctions between projects, everything sells off together.

How to Protect a Portfolio

When Bitcoin crashes, almost every crypto asset tends to move with it. Diversification within digital assets rarely works because correlations spike during stress. Investors need structural hedges instead of just holding more coins.

One approach is to use derivatives such as futures or perpetual contracts to hedge exposure or take advantage of volatility gaps when panic drives prices lower. Another is to keep part of the portfolio in stablecoins or tokenized gold, providing liquidity and a safe reserve when the market turns risk-off.

Tracking short-term correlation between Bitcoin, Ether, and XRP can serve as an early warning sign of contagion. If those links tighten, it signals that a broad selloff may be forming. Finally, yield-generating assets like staking or lending pools can soften losses by providing steady returns while prices recover.

Investors can track the prices of their favorite cryptos on the TipRanks Cryptocurrency Center. Click on the image below to find out more.