The crypto market's reaction to shifting regulatory tides has been uneven at best

While the broader market has been slow to reprice in the wake of a more pro-crypto SEC, XRP's rally stands out. And according to Matt Hougan, Chief Investment Officer at Bitwise Asset Management

In the constantly shifting landscape of cryptocurrency, tokens react to regulatory news in varying degrees. But if there’s one token that seems to have emerged as a clear winner post-election with a more pro-crypto SEC, it’s Ripple's XRP.

While the broader crypto market has been slow to reprice in the wake of a more pro-crypto SEC and Elon Musk’s return to X, the lack of any major regulatory surprises has left crypto in a holding pattern. But not XRP. The token has seen strong gains since December, and according to Bitwise Asset Management Chief Investment Officer Matt Hougan, there’s a simple reason for that.

“The bet you’re making on XRP, it’s a B2B-oriented chain, and they were simply unable to execute on that strategy with the sort of the SEC on top of them,” Hougan explained. Unlike Ethereum or Solana, which continued to develop and expand within the crypto-native world, XRP’s growth was stunted by regulatory overhang.

“The bet you’re making on XRP, it’s a B2B-oriented chain, and they were simply unable to execute on that strategy with the sort of the SEC on top of them,” Hougan explained. Unlike Ethereum or Solana, which continued to develop and expand within the crypto-native world, XRP’s growth was stunted by regulatory overhang.

“Other assets like Ethereum, Solana, etc. had more crypto-native use, and so they were able to grow even with that regulatory uncertainty.”

The legal battle put the token’s entire business model on pause for years. Now, with those shackles removed, Hougan sees the market taking stock of the newfound opportunity.

“They were unable to execute on their core business strategy in any way, shape or form for four years. So when you release that and they’re now able to do that, I understand why it’s rallied.”

That's not to say a rally equals victory. Hougan was quick to temper expectations, adding that regulatory clarity is only step one.

“It’s important to note it doesn’t mean they’ve won by any sense. They still have to prove themselves in the market, but at least now they have the chance. And so I think that’s why they’ve done so well.”

More broadly, Hougan believes the entire crypto space is overdue for a reevaluation given the shift in regulatory tone.

More broadly, Hougan believes the entire crypto space is overdue for a reevaluation given the shift in regulatory tone.

“The entire space, you know, in my view, should be revalued and reconsidered in this new regulatory era. And I’m quite frankly surprised it hasn’t happened yet in the market. I think it will happen.”

If he’s right, XRP may not be the only token that benefits from a more favorable SEC. But for now, the market seems to be taking a cautious approach.

If he’s right, XRP may not be the only token that benefits from a more favorable SEC. But for now, the market seems to be taking a cautious approach.

“They’re all better off today than they were six months ago. And, you know, my base view is that the market doesn’t understand how challenging it was six months ago. And so they don’t appreciate, uh, sort of the wide open pasture that exists today.”