Cryptocurrencies Jump as Investor Appetite Shifts to Smaller, Higher Risk Coins Ahead of President-elect Donald Trump's Inauguration

Major cryptocurrencies traded higher on Thursday evening, led by gains in smaller, higher risk coins as investors awaited President-elect Donald Trump's inauguration on Monday.

XRP and litecoin were among the biggest movers, up 13% and 22%, respectively, over the past 24 hours, according to Coin Metrics. The CoinDesk 20 index, a broad crypto market benchmark, gained nearly 5%.

Bitcoin was up less than 1% near $100,000, following a two-day rally of about 7% this week. Ether fell nearly 3% on Thursday.

Trading platform operators Coinbase and Robinhood each rose roughly 2%. MicroStrategy, which trades as a bitcoin proxy, was up less than 1%.

"Retail investors [are] looking for opportunities as a new pro-crypto administration gets ready to roll in," Alexander Blume, CEO of the adviser firm Two Prime Digital Assets, told CNBC. "The Trump administration is a rising tide that will lift all boats in crypto, and altcoins are seeing some early gains from this."

Trump's inauguration is slated for Monday. Among his campaign promises were plans to install a crypto advisory council in his first 100 days in office and replace Securities and Exchange Commission Chair Gary Gensler, who became a notable adversary of the industry during his tenure.

The CoinDesk 20 advanced 98% in the one month following the November election. In that same period, bitcoin posted a 46% gain.

Another thing driving the action in small-cap cryptocurrencies is the possibility that the government's "expected strategic reserve may include other 'American' cryptocurrencies," like XRP and the Solana token, Blume said.

"This is unlikely, [but] it comes as a surprise and is fueling speculators to buy the coins," he said. "The best long-term value for investors will still be in bitcoin."

Trump has also promised to establish favorable regulation to encourage domestic "made in the USA" bitcoin mining and launch a strategic national bitcoin stockpile. Investors expect volatility in the flagship cryptocurrency this year, with bitcoin stuck in a tug of war between investors' concerns about rising inflation under Trump and their optimism over the his pro-crypto leadership.