Last week XRP replaced tether ( USDT) as the third largest cryptocurrency by market cap. As Trump’s inauguration approaches, anticipation of a crypto-friendly agenda—including regulatory reforms and a potential Bitcoin reserve— reached a fever pitch.
All Eyes Were on Bitcoin and XRP
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Trump Administration’s Plans Fueled Speculation and XRP’s Rise
Trump’s inauguration is a few days away, and what was a consensus sell-the-news event a month ago is now, I daresay, a hold or buy event. One of the biggest factors is probably due to the correction crypto markets have experienced leading up to the inauguration. From its recent peak, Bitcoin dropped as much as 17%, Ethereum nearly 30%. This flush helps clear leverage and shake out weak hands.
Another reason is because of the news coming out about the Trump admin’s expected pro- crypto actions. There are reportedly day-one Executive Orders to address de-banking practices and promote a more innovation-friendly regulatory framework for digital assets. There are even rumors circulating that the much-anticipated Strategic Bitcoin Reserve could be a Strategic Crypto Reserve instead. A report from the New York Post suggests that Donald Trump is considering including Solana ( SOL), Ripple’s XRP, and Circle’s USDC alongside Bitcoin in an “America First” strategy. I find this unlikely, but these kinds of stories indicate that a bitcoin reserve is more likely.
While anticipation for another leg-up in bitcoin’s price builds, XRP is doing well right now. This week it replaced Tether as the third largest cryptocurrency by market cap. The Tether flippening immediately brought up the question of whether XRP will overtake Ethereum as the second-largest coin. ETH maxis might not get the joke, but it’s funny that in previous cycles Ethereum was the coin threatening to replace an incumbent and now it is being threatened. Even funnier, it’s XRP, an almost universally maligned coin by people within the crypto industry. Normal readers of this newsletter will know that I have been writing positively about XRP for months and I still maintain it will do well, but I do not think it is likely XRP will flip Ethereum. Please, my ETH bags are trembling.
One bizarre XRP story that came out this week was that the soon-to-be reformed SEC has escalated its legal battle with Ripple, filing an appeal to contest portions of a district court ruling. Ripple’s leadership has dismissed the SEC’s move as futile and misaligned. I couldn’t agree more. To do so a week before regime change is blatant vindictiveness.
