Forget the Days of Crypto Fighting the System – Because Now, the System Is All In

Now there’s a US President (and his wife!) launching meme coins and on a more serious note, we have Bitcoin (BTC) ETFs, talks of a Bitcoin strategic reserve, a crypto-friendly Treasury Secretary and nominee for SEC Chair, along with a new executive order on digital assets.

Cryptocurrencies have come a long way from being an anti-establishment concept. Now, even the mainstream financial world is embracing digital assets in a big way.

A Pro-Crypto Shift in the US Government

Fresh off the heels of a record-breaking year for cryptocurrencies, the new year has brought about a surprising development. The US government, once known for its skepticism toward crypto, is now making a shift toward a pro-crypto stance.

This shift is evident in several key developments, including President Biden's executive order on digital assets, the launch of meme coins by the First Family, and the nomination of crypto-friendly candidates for key positions within the SEC and Treasury Department.

These developments, together with the presence of a crypto ETF and talks of a Bitcoin strategic reserve, have contributed to a favorable environment for cryptocurrencies within the US.

As a result of this newfound optimism, Bitcoin has soared to new all-time highs. However, among the top cryptocurrencies, one has stood out with an astronomical gain of 377% since Trump's victory in the November election.

The cryptocurrency in question? None other than Ripple's XRP. Several factors have fueled XRP's impressive gains.

The ongoing legal battle with the SEC, in which the regulatory body alleges that Ripple sold XRP as an unregulated security, might take a positive turn. With former SEC Chair and crypto adversary Gary Gensler out of the picture, investors are hopeful that a Trump-backed replacement could lead to a more favorable outcome, potentially even getting the case dropped.

Additionally, growing speculation around a spot XRP ETF has boosted optimism, as several investment firms, including those behind Bitcoin ETFs, have filed applications, making approval seem increasingly likely.

With these catalysts at play, and looking at the impressive gains generated over such a short period of time, it could tempting to swap BTC for the excitement of XRP's momentum.

However, investor Justin Pope (J.P.モルガン) urges investors to think twice before making such a move.

“It's tempting to chase the shiny object, and XRP does have legitimate long-term potential if it can integrate deeper into global payments,” Pope said. “However, investors shouldn't rush to abandon Bitcoin.”

While XRP could potentially benefit from the developments outlined above, Bitcoin could have a “massive catalyst” of its own if the US moves forward with a strategic reserve of Bitcoin. “It would likely push other countries to follow suit and increase institutional accumulation,” Pope said.

But is there really a need to choose one over the other? The good news is that, according to Pope, investors don't have to pick only one investment vehicle.

Bitcoin and XRP Serve Different Roles in Crypto Investing

Bitcoin and XRP, while both cryptocurrencies, serve different roles in the crypto space. This makes it perfectly reasonable for investors to hold both as part of a diversified portfolio. And with the way things are going for crypto in general, holding both BTC and XRP could be the way to go.

“The developments within the government seem to indicate that cryptocurrencies could see an uptick in adoption over the next several years, giving investors plenty of good reasons to buy and hold cryptos with real-world utility like these two,” Pope summed up.

To find good ideas for crypto stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights on one screen.