Cryptocurrencies Leap as Investors Shift Focus to Smaller Coins With Trump's Inauguration Around the Corner

Cryptocurrencies surged on Thursday, with a particular focus on smaller, riskier coins, ahead of President Trump's inauguration.

XRP and litecoin led the gains, rising 13% and 22%, respectively. The CoinDesk 20 index, tracking a broad range of cryptocurrencies, saw a nearly 5% increase.

Bitcoin, on the other hand, was up less than 1%, staying below the $100,000 level after a two-day rally of about 7%. Ether, however, declined nearly 3% on Thursday.

According to Alexander Blume, CEO of Two Prime Digital Assets, retail investors are seeking opportunities as a pro-cryptocurrency administration prepares to take over. He anticipates that Trump's presidency will uplift the entire crypto market, leading to early gains for altcoins.

With Trump's inauguration set for Monday, trading platforms like Coinbase and Robinhood saw their stocks rise by about 2%. MicroStrategy, often used as a proxy for Bitcoin, also edged higher.

Gracy Chen, CEO of Bitget, highlighted that the first 50 days of Trump's presidency could shape Bitcoin's future up to 2025. The market has high expectations for his initial actions as president, given how crypto prices have reacted to his statements recently.

During his campaign, Trump promised to create a crypto advisory council within his first 100 days and to replace SEC chair Gary Gensler, who has taken a strict approach towards the cryptocurrency industry. Following the November election, the CoinDesk 20 index surged by 98%, and Bitcoin gained 46% during the same period.

Another factor driving interest in small-cap cryptocurrencies is the speculation that the government might include "American" cryptocurrencies like XRP and Solana in its strategic reserve, according to Blume. While this is a remote possibility, it's generating interest among speculators.

Blume also noted that while Bitcoin remains the best long-term investment, the excitement around these smaller coins is evident.

Trump has also hinted at favorable regulations to boost domestic Bitcoin mining and even a national Bitcoin stockpile. Investors are preparing for a year of volatility, balancing concerns over inflation under Trump's policies with optimism about his pro-cryptocurrency stance.