The overall cryptocurrency market has risen 24% since the November presidential election. Donald Trump has accepted digital assets during the campaign and despite stagnation in recent weeks, some Wall Street experts are still expecting a big gain XRP(Encryption: XRP) and Bitcoin(Encryption: BTC).
Dom Kwok, former Goldman Sachs Employee and co-founder of blockchain education company Easya, earlier this year Ethereum Be the second most valuable cryptocurrency. As of February 27, Ethereum's market value was $282 billion, while XRP's market value was $128 billion. So, Kwok's forecast currently means at least 120% upside in XRP.
Tom Lee, managing partner and research director at FundStrat Global Advisors, said in the second half of last year that Bitcoin could exceed $250,000 in 2025, as spot Bitcoin exchange exchange funds (ETFs) and the upcoming presidential administration help legalize cryptocurrencies. As of February 27, Bitcoin was trading at $86,000, so his forecast means 190% upside.
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XRP is a local cryptocurrency on the Ripple blockchain, a platform for cross-border payments and foreign currency exchanges. Currently, most international payments are done through the Swift (Association of Banking Finance and Telecommunications on the Global) system, but the process usually involves intermediaries, making transactions expensive and time-consuming.
Ripple designed what it considers to be a better system. Its blockchain uses XRP tokens as a bridge currency for faster and cheaper payments. While fewer than 200 financial institutions currently use the platform, adoption may increase when lawsuits against the Securities and Exchange Commission (SEC) are fully resolved.
To elaborate, the SEC sued Ripple in 2020, accusing it of selling XRP for unregistered security. In August 2023, a U.S. District Court issued a sub-ruling ruling that certain transactions are tax-free, but others should comply with securities laws. The result is Ripple's fine of $125 million, well below the $2 billion the SEC wants. But the SEC has since appealed the decision.
Importantly, Ripple recently introduced a Ripple USD (rlusd). Its value is closely related to the US dollar, providing companies with volatile areas for transactions on blockchains with less volatility. However, stablecoins should still increase demand for XRP, as native cryptocurrencies will be used to pay for RLUSD transaction fees.
Finally, several asset managers have submitted applications to the SEC to create a SPOT XRP ETF. These funds will provide XRP exposure without the hassle and high fees associated with cryptocurrency exchanges. Bitcoin has earned more than 80% of the gains since the SEC approved the live Bitcoin ETF approved in January 2024, and XRP may generate similar returns.
Here is the bottom line: I think XRP can double in 2025, but only if Ripple resolves its legal issues with SEC and SPOT XRP ETFS WIN approval. In addition, the Bank of Japan recently adopted XRP for cross-border payments, which will further legitimize its role in the financial system. Investors who are satisfied with risk and volatility should consider buying very small positions today.
Bitcoin has a market capitalization of $1.7 trillion, making it the most valuable cryptocurrency. It has become increasingly popular among retail investors and institutional investors since the SEC approved the live Bitcoin ETF last year. These funds attracted a net inflow of $37 billion in 2024. ishares Bitcoin Trust from Black Stone It is the most successful ETF launch in history Wall Street Journal.
Matt Hougan, chief investment officer of Bitwise, pointed out last year that institutional investors adopted spot Bitcoin ETFs at the “fastest pace of any ETF in history.” In fact, the recently filed Form 13F shows that over 1,100 asset managers held positions in iShares Bitcoin Trust as of the fourth quarter, up from 600 in the second quarter.
This trend is particularly important because institutional investors have approximately $120 trillion in assets under management (AUM). Even a small portion of Bitcoin is allocated to make it more expensive. BlackRock CEO Larry Fink recently said Bitcoin could hit $700,000 if more asset managers invest 2% to 5% of AUM in cryptocurrencies.
Importantly, Tom Lee predicted in November 2024 that Bitcoin will exceed $250,000 in 12 months. However, he also said that cryptocurrency could drop to $65,000 and then return to $250,000. The first half of his forecast appears to be on the market. Bitcoin hit a record $109,000 earlier this year, but has since fallen 21% to $86,000.
Here's the bottom line: I'm skeptical that Bitcoin reaches $250,000 in 2025, but I do believe this will be more value in the future. Patient and risk-comfortable patients investors can buy smaller locations today. It is wise to have an allocation range from 2% to 5% of the portfolio.
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Trevor Jennewine has no position in any of the stocks mentioned. Motley fool has a place and recommends Bitcoin, Ethereum, Goldman Sachs Group and XRP. Motley Fool has a disclosure policy.
According to some Wall Street experts, 2 top cryptocurrencies were purchased before soaring 120% and 190%.
