The total value of all cryptocurrencies in circulation reached a new record high of $3.9 trillion shortly after Election Day on November 5 last year. This breakthrough can be attributed to President Donald Trump’s pro-crypto stance and the friendly policies that may follow now that his administration is officially in power.
Between November 5 and January 17 (date of writing these lines), XRP (XRP -7.13%) climbed 539%, Dogecoin (DOGE -10.05%) jumped 154%, and Bitcoin (BTC -5.05%) rose 50%.
The Trump administration is a positive catalyst for each of these three popular cryptocurrencies for different reasons, but which one will be best to buy in 2025?
The case for XRP: friendly regulation
The global banking system is complex and not all institutions use traditional payment networks like SWIFT (Society for Worldwide Interbank Financial Telecommunication) to process transactions. As a result, international transfers can take days to clear. In 2012, a company called Ripple created a global payment network, called Ripple Payments, to solve this problem.
The network standardizes payment protocols to allow all banks to communicate with each other, regardless of the infrastructure they use. This essentially means that they can settle transactions with each other directly and instantly. Ripple created XRP cryptocurrency that banks can use in these transactions, so they can save money on exchange fees and other costs.
XRP has a total supply of 100 billion tokens. Around 57 billion are in circulation, while the remaining 43 billion are controlled by Ripple, which gradually releases them each month to meet demand from institutions. Therefore, it is very different from a decentralized cryptocurrency like Bitcoin, whose supply is capped and cannot be controlled by any person or company.
This is why the United States Securities and Exchange Commission (SEC) sued Ripple in 2020, arguing that the XRP token should be a registered financial security (like a action or a bind). Companies that issue securities must operate under a strict set of rules, so Ripple’s business has faced significant disruption. However, in August 2024, the lawsuit was largely resolved when the judge only sanctioned Ripple with a $125 million fine, which investors considered a victory.
The SEC is appealing the decision, but investors believe the case could disappear entirely with Trump’s team now in operation. The president’s pick to lead the SEC, Paul Atkins, is a pro-crypto businessman who currently serves as co-chair of an industry advocacy organization called the Token Alliance. He will likely be confirmed by the Senate very soon, so it won’t be long before investors know if Ripple is finally out of the woods.
The case of Dogecoin: Elon Musk
I want to start by reminding readers that Dogecoin was literally created as a joke by its two founders in 2013. However, it took off in 2021 when Tesla CEO Elon Musk started promoting it on social media, sharing memes and joking with other enthusiasts.
His support reached a new level on May 8, 2021 when he participated in a Dogecoin-sketch on the theme Saturday Night Live (SNL). At this point, the token was sitting on an incredible 15,769% gain for the year, but its all-time high of $0.73 the night of Musk’s SNL appearance proved to be the high. Once investors realized he didn’t have a proper plan to back up his jokes, Dogecoin plunged more than 90% and it still hasn’t fully recovered.
Dogecoin remained inactive for three years until Trump’s election victory on November 5. Musk was a major financial backer of the presidential campaign, and when crypto markets began to soar, its influence over Dogecoin was reignited. Shortly after the election, Trump announced he would appoint Musk to lead an initiative to cut government spending. It will be called “Department of Government Efficiency”, or DOGE for short, in reference to the Tesla chief’s favorite cryptocurrency.
There is no indication that Dogecoin will play a role in the project, but that hasn’t stopped investors from pushing it to a new 52-week high of $0.47. That said, given that it’s still below its 2021 high of $0.73, perhaps investors are actually, I’m more careful this time.
Since there are no concrete fundamentals supporting Dogecoin, there is a real risk that this latest rally ends the same way as the last one – in a possible collapse of 90% or more.
Image source: Getty Images.
The case of Bitcoin: a reserve of the American government, and more
Bitcoin has a market capitalization of $2.05 trillion, which represents more than half of the total value of all cryptocurrencies in circulation. It continues to advance to new heights thanks to a series of tailwinds, including the approval of dozens of exchange traded funds (ETF) by the SEC last year. In other words, while Ripple has opposed the regulator, Bitcoin has gained its support.
Trump’s election victory fueled the situation Bitcoinin 2024. He was practically an advocate for cryptocurrency during the election campaign, lending his support to radical ideas such as establishing a strategic Bitcoin reserve within the government. If this were to happen, the US Treasury Would potentially become an active buyer of Bitcoin on the open market, which would support its price and also legitimize it as a store of value.
Additionally, Bitcoin bulls like MicroStrategyMichael Saylor of Michael Saylor is pushing for the Trump administration to build a framework for digital assets (a system of rules and laws) to pave the way for broader adoption. He believes Bitcoin could eventually become the reserve currency for $500 trillion in “tokenized” real assets. In other words, he thinks that blockchain will replace existing systems of record and Bitcoin will be used to buy, sell and transfer everything from real estate to company shares.
Personally, I think it’s a bit too ambitious. It is more likely that Bitcoin will become a widely recognized store of value, much like a digital version of gold, especially now that exchange-traded funds (ETFs) make it easy for financial advisors and institutional investors to purchase it from safe and regulated manner.
The total value of all underground gold reserves currently stands at $18.4 trillion. Bitcoin’s market capitalization of $2.05 trillion would need to grow by 797% to reach this figure, which would translate into a price per coin of $924,000. This is certainly more achievable than Saylor’s price target of $13 million per Bitcoin.
The verdict
XRP is the most interesting cryptocurrency in this group because it appears to have a legitimate use case within Ripple Payments, which should theoretically create value over the long term. But here’s the problem: banks don’t do it to have use XRP to use Ripple Payments, as they can also transact in fiat currency.
In other words, XRP’s future rise does not rely on the success of Ripple’s payment network. XRP is essentially subject to the whims of speculative investors, which means it’s not that different from a token like Dogecoin.
Even if Bitcoin is technically also a speculative asset (investors buy it in the hope that someone else will pay a higher price in the future), its decentralized nature, capped supply, and availability of ETFs have consistently made it pushed to new heights. Now, with the potential for a US government Bitcoin reserve on the horizon, I think this cryptocurrency has the best case for a rise in 2025 (and beyond).