The overall cryptocurrency market has climbed 24% since the presidential election in November. Donald Trump embraced digital assets during his campaign and, while upward momentum has stalled in recent weeks, some Wall Street experts still anticipate big gains in XRP(CRYPTO: XRP) and Bitcoin(CRYPTO: BTC).
Dom Kwok, former Goldman Sachs employee and co-founder of blockchain education company EasyA, earlier this year said XRP had a good shot at replacing Ethereum as the second most valuable cryptocurrency. As of Feb. 27, Ethereum has a market value of $282 billion, while XRP has a market value of $128 billion. So, Kwok’s prediction currently implies at least 120% upside in XRP.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, late last year said Bitcoin could exceed $250,000 in 2025 as spot Bitcoin exchange-traded funds (ETFs) and the incoming presidential administration help legitimize the cryptocurrency. As of Feb. 27, Bitcoin trades at $86,000, so his prediction implies 190% upside.
Read on to learn more.
XRP is the native cryptocurrency on the Ripple blockchain, a platform built for cross-border payments and foreign currency exchanges. Most international payments are currently routed through the SWIFT (Society for Worldwide Interbank Financial Telecommunications) system, but the process often involves intermediaries that make transactions costly and time consuming.
Ripple designed what it believes is a better system. Its blockchain uses the XRP token as a bridge currency to enable faster, less expensive payments. While fewer than 200 financial institutions currently use the platform, adoption could increase when the lawsuit with the Securities and Exchange Commission (SEC) has been completely resolved.
To elaborate, the SEC sued Ripple in 2020, alleging it sold XRP as an unregistered security. In August 2023, a U.S. district judge issued a split decision, ruling certain transactions were exempt but others should have complied with securities laws. The result was a $125 million fine for Ripple, far less than the $2 billion the SEC wanted. But the SEC has since appealed the decision.
Importantly, Ripple recently introduced a stablecoin called Ripple USD (RLUSD). Its value is tied to the U.S. dollar, providing enterprises with a less volatile means of transacting on the Ripple blockchain. However, the stablecoin should still boost demand for XRP because the native cryptocurrency will be used to pay fees on RLUSD transactions.
Finally, several asset managers have submitted applications to the SEC to create spot XRP ETFs. Those funds would offer XRP exposure without the hassle and high fees associated with cryptocurrency exchanges. Bitcoin has gained more than 80% since the SEC approved spot Bitcoin ETFs in January 2024, and XRP could generate similar returns.
Here is the bottom line: I think XRP could double in 2025 but only if Ripple resolves its legal issues with the SEC and spot XRP ETFs win approval. Additionally, the Bank of Japan recently adopted XRP for cross-border payments, which should further legitimize its role in the financial system. Investors comfortable with risk and volatility should consider buying a very small position today.
Bitcoin’s market capitalization of $1.7 trillion make it the most valuable cryptocurrency by a wide margin. And it has become increasingly popular with retail investors and institutional investors since the SEC approved spot Bitcoin ETFs last year. Those funds attracted $37 billion in net inflows in 2024, and the iShares Bitcoin Trust from BlackRock was the most successful ETF launch in history, according to The Wall Street Journal.
Matt Hougan, chief investment officer at Bitwise, noted last year that institutional investors were adopting spot Bitcoin ETFs at “the fastest rate of any ETF in history.” Indeed, recently filed Forms 13F indicate more than 1,100 asset managers held positions in the iShares Bitcoin Trust as of the fourth quarter, up from 600 in Q2.
That trend is particularly important because institutional investors have about $120 trillion in assets under management (AUM). Even a small fraction of that sum allocated to Bitcoin could drive its price much higher. BlackRock CEO Larry Fink recently said Bitcoin could hit $700,000 if more asset managers invested 2% to 5% of their AUM in the cryptocurrency.
Importantly, Tom Lee in November 2024 predicted Bitcoin could top $250,000 within 12 months. However, he also said the cryptocurrency may dip to $65,000 before soaring back toward $250,000. The first half of his forecast seems to be playing out in the market right now. Bitcoin earlier this year reached a record high of $109,000 but has since tumbled 21% to $86,000.
Here is the bottom line: I am skeptical about Bitcoin reaching $250,000 in 2025, but I do believe it will be worth more in the future. Patient investors comfortable with volatility and risk can buy a small position today. An allocation ranging from 2% to 5% of a portfolio is sensible.
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Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Goldman Sachs Group, and XRP. The Motley Fool has a disclosure policy.
2 Top Cryptocurrencies to Buy Before They Soar 120% and 190%, According to Certain Wall Street Experts was originally published by The Motley Fool
