Crypto’s march toward mainstream adoption got a real boost with Trump taking back the White House last November. In contrast to prior administrations – and Trump’s previous position – from the outset the new regime seemed to be taking a wholly more favorable stance toward digital assets.
That was reflected in a post-election surge for Bitcoin and its fellow coins, but one name in particular seemed to soar above others in the aftermath of Trump’s victory.
Ripple (XRP) has been a major beneficiary here, and even after retreating from recent highs, it has climbed by 355% since November 5. That’s because the shifting regulatory winds weren’t just a tailwind — they were a game-changer. To understand what’s driving XRP’s rise, we need to rewind to December 2020.
That’s when the SEC came after Ripple, alleging that XRP had been sold as an unregistered security. Fast forward to 2023, a federal judge determined that XRP qualified as an unregistered security when sold to institutional investors but not when retail investors bought it via exchanges. The SEC appealed, but after Trump’s election victory and his pro-crypto stance, it became evident that the appeal was unlikely to proceed. Following Trump’s inauguration, SEC Chair and crypto foe Gary Gensler resigned, and recently, Garlinghouse announced on X that the SEC had withdrawn its appeal.
The resolution of the lawsuit finally lifts a significant cloud that has been hanging over XRP and opens the door for a potential spot XRP ETF. In fact, even before the case was settled, several asset managers had already filed proposals with the SEC to introduce spot XRP ETFs.
So, with that overhang now out of the way, and the prospect of an ETF more real than ever, is now a good time to be loading up on XRP?
Not so fast. According to 5-star investor Bram Berkowitz, the favorable outcome had already been widely anticipated. In his view, much of the upside was “increasingly probable” – and already priced in by the time the news broke.
Nevertheless, Berkowitz thinks that “better banking laws and removal of the overhang should allow Ripple to grow its customer base and therefore expand the use of XRP.”
Regulators under the Trump administration are expected to ease restrictions on banks interacting with cryptocurrencies, potentially increasing banks’ interest in partnering with Ripple. Additionally, Ripple introduced its own dollar-pegged stablecoin, RLUSD, with the company believing it will benefit from growing stablecoin adoption.
Yet, while Berkowitz says he finds some of XRP’s use cases compelling, and the token operates on a robust and well-designed network from a technical standpoint, he advises not to go all in.
“You should still keep your position smaller and more speculative,” he says. “All cryptocurrencies are volatile and they’re hard to value because they don’t generate cash flows or earnings. There’s still a lot we don’t know about the sector because it’s only been around for a little over 15 years.” (To watch Berkowitz’ track record, click here)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.