The price of XRP (CRYPTO: XRP) has blasted over 122% higher (as of Nov. 19) since election night, vastly outperforming the likes of Bitcoin (CRYPTO: BTC), the world's largest cryptocurrency. The sector has gone higher as well, as President-elect Donald Trump has positioned himself as a friend to the crypto industry and vowed to make changes favoring the industry and bringing the crypto spotlight back on the U.S.
While I think the sector can continue to perform well with a more friendly regulatory environment and lower interest rates, XRP is poised to outperform. Here are four reasons why XRP can go parabolic in 2025.
1. Welcome to Robinhood
The popular online brokerage Robinhood recently began selling XRP on its platform to its more than 24 million funded customers, who have $152 billion assets under custody at the company. Robinhood has added new tokens to its platform slowly in recent years due to fears of regulatory blowback from the U.S. Securities and Exchange Commission (SEC) for potentially selling unregistered securities.
However, with Trump expected to shake up the SEC, fewer regulatory concerns should exist when it comes to selling more tokens. The Robinhood listing should increase retail investors' exposure to XRP, because Robinhood is known for its ease of use.
2. Potential spot XRP ETFs
The launch of Bitcoin and Ethereum spot exchange-traded funds led to big run-ups for their perspective prices. Spot ETFs are another way cryptocurrencies can increase their liquidity and exposure. Cryptocurrencies can be more difficult for the average investor because purchasing typically involves digital wallets and remembering long passphrases for access. ETFs can be purchased and traded like stocks and are more likely to be offered at various stock brokerages and, therefore, in retirement accounts.
Companies like Bitwise are already preparing to launch spot XRP ETFs, although they haven't been approved yet. Ripple Labs CEO Brad Garlinghouse recently said that a spot XRP ETF is "inevitable."
3. The end of the SEC lawsuit
XRP, Ripple, and the creators of XRP, Garlinghouse and Chris Larsen, have been the poster child for an SEC lawsuit that ultimately seeks greater regulatory jurisdiction over cryptocurrencies. The SEC believes it should have more regulatory oversight over cryptocurrencies because many are traded as speculative investments and should therefore be treated as securities. That idea includes burdening crypto networks with additional requirements such as registration with the SEC and reporting obligations.
Crypto proponents believe the SEC is overreaching and that cryptocurrencies should be regulated as currencies overseen by the Commodity Futures Trading Commission.
Ripple, its founders, and XRP have been caught in the middle of this argument. In 2020, the SEC sued the parties for allegedly selling XRP as an unregistered security in 2013. A judge ruled in favor of the defendants, but then the SEC appealed parts of the case. The case should conclude in 2025, and I am not a lawyer but a favorable outcome seems likely.
The lawsuit has served as an overhang on XRP's price, so ending the lawsuit once and for all should be positive.
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4. XRP has underperformed peers
Even after a big recent rally, XRP has underperformed peers from the larger cryptocurrencies like Bitcoin and Ethereum to meme tokens like Dogecoin. Part of this is likely due to the lawsuit. However, XRP is one of the early tokens and has a compelling use case with its ability to provide companies with faster cross-border payment capabilities.
XRP also has a fixed supply, which not all cryptocurrencies do. That could make it a potential inflation hedge, which could be useful if Trump's policies are inflationary as some economists expect. Due to the underperformance, XRP may have more room to run, especially if conditions continue to be favorable for the sector.
Should you invest $1,000 in XRP right now?
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Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
