Much of Groundhog Day's story concerns Phil's clumsy attempts to romance Rita (Andie MacDowell) and his efforts to make his place in the time loop more bearable. A great deal of comedy is derived from the monotony and how it affects Phil, with the journey of self-discovery he embarks upon one of the movie's central narrative veins. The idea that the time loop helps Phil to better understand himself and his place within the world is the driving force behind Groundhog Day's story, although there are still mysteries as to the exact nature of the loop in which he becomes trapped.
One theory first posted to Reddit assigns greater importance to one of Groundhog Day's supporting characters - Ned Ryerson (Stephen Tobolowsky), the insurance salesman Phil is seen repeatedly brushing off in the loop. Groundhog Day's status as one of the best romantic comedies of all time means that occasionally, the depth of its fantastical element - the time loop - is overlooked. The theory goes that Ned Ryerson is actually the embodiment of the Devil, and that he deliberately traps Phil in the time loop as a form of punishment. It's a brilliantly convincing theory, but it also tarnishes Groundhog Day's happy ending with an incredibly dark subtext.
The theory that Ned Ryerson is the Devil is an interesting one. The theory goes that after Phil is so casually cruel in his dismissal of Ryerson, the insurance salesman/Prince of Darkness decides to torment the self-centered weatherman. The idea of the Devil punishing those who commit selfish acts is a fairly standard one, so it makes sense - even if does add a horrifying undertone to the otherwise fairly upbeat comedy.
The Devil's time loop theory also believes that Phil being freed from the loop has nothing at all to do with Rita. The theory explains that the final day of the loop is the only one in which Phil actually purchases insurance from Ned, and that Ned/the Devil took this as confirmation of Phil's personal growth. The theory believes that, having successfully taught the weatherman a lesson, Ned frees Phil - thus defining Groundhog Day's time loop rules far better than the film does in any overt sense.
The theory also comes complete with a compelling amount of evidence that may well prove that Ned Ryerson is, in fact, the Devil in the beloved Bill Murray comedy. One or two of these are fairly innocuous: the framing of the shot in which Ned torments Phil upon his first day inside the loop focuses on steam and the color red, as well as the fact that Ned himself is the one who laughs at Phil's "first step" into the loop. There's also the fact that Phil's two most significant interactions with Ned happen to coincide with the beginning and end of the loop.
Circumstantial evidence for the theory aside, part of what makes it so convincing is how neatly it fits into Groundhog Day's story. As the film does very little to explain the specifics of its time loop story. However, evidence for the time loop being caused by Ned as a result of Phil's unpleasant behavior is offered freely, making it one of the most plausible explanations for Groundhog Day's biggest unanswered question. This makes the theory incredibly convincing because it not only fills one of Groundhog Day's loose narrative threads, but it does so with actual evidence from the film itself.
One of the most interesting aspects of the theory is how much it changes the subtext of Phil's journey in Groundhog Day. Though Phil's personal growth remains the same, the way in which the theory changes it is that it robs Phil of any credit. Instead of the character realizing the error of his ways, the theory about the time loop being caused by Ned/the Devil makes Phil's time in the loop a very literal punishment for his transgressions. By being rude and selfish, Phil earns his torment, and it's only through his continued suffering that he actually resolves to better himself.
The idea that the Devil is punishing Phil in Groundhog Day essentially makes the film's events Phil's penance. Once Phil is affected enough by his torment to allow it to fundamentally change his character, he's set free - in other words, once the Devil has broken him, he lets him loose. It's a subtle difference, but it makes Phil far less sympathetic to the audience, because he's not choosing to be better, he's manipulated into it.
Groundhog Day's ending set the precedent for practically every time loop movie - like the ending of Palm Springs or Happy Death Day emulated, the loop is ended and those who were trapped inside learn a valuable lesson with essentially no drastic complications. However, the Ned/Devil theory adds a much darker twist to Groundhog Day, and it's easy to miss - particularly as it's not even outwardly alluded to. If Ned is indeed the Devil, and the time loop was a form of punishment, this comes with serious implications: if Phil ever returns to his selfish ways, he could land himself in the same torment yet again.
There's also a moment in the final day of the loop in which Phil finally agrees to buy insurance from Ned. The theory posits that this may actually be Phil selling his soul (symbolically or literally) in order to escape the loop, and if it's true, then it worked, because Phil finally finds himself free. This means that the real meaning of the time loop theory is the way in which it turns Groundhog Day's happy ending into a nightmare - Phil sells his soul to the Devil, and chooses to stay in Punxsutawney with Rita, where Ned presumably somehow owns him. Regardless, the theory paints the picture that Phil's happy ending will be closely watched by Ned, and that if he ever slips up and regresses to his old ways, he may just find himself in another Groundhog Day time loop as punishment.