The crypto space’s reaction to Trump’s election win was a wholly favorable one. The space was already in bullish mode beforehand, given Bitcoin’s (BTC) growing institutional adoption – as seen by the approval and then popularity of spot BTC ETFs – and the fact Bitcoin’s post-halving years have historically represented the bull market’s peak.
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But interestingly, it wasn’t Bitcoin that reacted in the most positive way to Trump’s election win. Rather, Ripple (XRP), the fourth most valuable coin right now, has been the biggest beneficiary, having surged by a huge 376% since early November.
XRP’s big selling point is that it can be used as a bridge currency for international transactions, making them faster and cheaper. Instead of taking days, transfers happen almost immediately, and fees are just a tiny fraction of a cent. But that’s not what has been behind the surge.
XRP’s gains are on account of several factors. A key one is its legal battle with the SEC, which accused Ripple of selling XRP as an unregistered security. With former SEC Chair and crypto foe Gary Gensler now out, investors are optimistic that a Trump-backed replacement could lead to a more favorable ruling – or even see the case dropped altogether. The U.S. government as a whole has become more crypto-friendly, with looser regulations and a dedicated “crypto czar” to promote adoption. Another potential catalyst is seen in the expected launch of an XRP ETF. With Bitcoin and Ethereum ETFs already gaining popularity, an XRP ETF could attract more investors and drive up its value.
If that all sounds like reason enough to get on board, then 5-star investor Chris Neiger, who sits in the top 1% of TipRanks’ stock pros, suggests investors should have a rethink before hitting the Buy button.
“Most importantly,” says Neiger, “if you’re considering opening a position in XRP simply because it’s made impressive gains recently, that’s not a good enough reason. The coin is very volatile and could retreat as easily as it’s climbed higher.”
There’s also the question of real-world adoption. While XRP promises to be a more efficient way to process financial transactions, it’s up against SWIFT, the global payments giant used by 11,500 financial institutions. Neiger believes that disrupting an entrenched system like that is easier said than done.
Taken together, Neiger concludes that it is best to keep some distance here. “Personally,” he summed up, “I find XRP a bit too speculative. I think there are legitimate uses for it, and I understand why some people own it, but I’m happy to let this one go.” (To watch Neiger’s 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.
