Post-Election Surge in Cryptocurrencies: Sustaining the Gain or Losing Steam?
Financial markets have been on a rollercoaster ride since the elections, with the S&P 500 index soaring by 5% from election day to February 10. But the real stars of the show have been the cryptocurrencies, specifically Algorand, Stellar, and XRP, which have seen market-crushing results in recent months.
Let's dive into why these three cryptocurrencies have been on a tear.
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Algorand's governmental hopes
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Algorand initially saw a surge when the Trump administration suggested cancelling capital gains taxes on cryptocurrencies with American headquarters. With its governing foundation based in Boston, Mass., Algorand certainly fits the bill.
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More recently, the Algorand team has offered up their blockchain network for use as an information-tracking platform for the Department of Government Efficiency's advisory board. They argue that their quantum-resistant cryptography makes them uniquely suited for the task.
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Stellar's twist on the Washington upside
XRP
Stellar followed a similar path to its current perch. It's another mostly American project with headquarters in San Francisco. They may be in line for the same tax-friendly treatment as Algorand.
On top of that, the Federal Reserve has listed Stellar as one of the options for its upcoming payment system, FedNow. While Stellar is not the only name under consideration, this could be a significant win for a relatively small player in the crypto market.
XRP Price data by
XRP may get to leave the courtroom in 2025
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Finally, XRP investors have been looking for a more crypto-friendly version of the Securities and Exchange Commission (SEC) since December 2020, when they filed a lawsuit against Ripple Labs, the company behind XRP. The XRP team has been faring well in recent turns of that legal action, but the SEC still insists on filing appeals.
Algorand team has volunteered its blockchain network as an information-tracking platform for the newly created Department of Government Efficiency advisory board. The team argues that its quantum-resistant cryptography makes it uniquely suitable for this task.
A Trump-flavored update to the SEC may change that in a hurry. Acting chairman Mark Uyeda has refocused the agency's crypto attitude from enforcement to regulatory transparency. The XRP community is looking forward to putting the legal drama behind them under this regime.
FedNow payment system. Stellar is not the only name under consideration, but this could be a big win for a relatively small player in the crypto market.
The crypto world's growing pains
the end of appeals and refilings under this regime.
These cryptocurrencies are soaring for good reason. They also seem to have room for continued growth.
The cryptocurrency market is still in its infancy. The regulatory and legal frameworks involved in trading and owning them is still under development. And most Americans may have heard of these digital assets by now, but very few people own any -- or plan to buy crypto in the near future.
The cryptocurrency market is still in its infancy. The regulatory and legal frameworks involved in trading and owning them is still under development. And while many Americans may have heard of these digital assets by now, very few actually own any - or plan to buy crypto in the near future.
Fool Money's annual cryptocurrency poll recently showed that people who haven't tried owning crypto aren't likely to take that step. 93% of respondents who currently own cryptocurrencies are at least "somewhat likely" to buy more in 2025. That cohort drops to 16% when you look at people who have never owned crypto before.
However, traditional financial advisors are starting to take these digital assets more seriously, which could change things in the near future. Financial services powerhouse Blackrock suggests directing about 2% of your long-term investment portfolio toward cryptocurrencies, up from absolutely nothing in 2023.
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XRP, Stellar, and Algorand should benefit from a generally larger cryptocurrency market. Moreover, each project has specific qualities and long-term goals. XRP could be a giant of international payments in the long run. Stellar wants to manage local payments, too. Algorand has lots of decentralized finance apps under development, hoping to find a killer app one of these days.
altcoins will eclipse Ethereum and Bitcoin in the long run, or that you should go all-in on any cryptocurrency. But this exciting sector might deserve 2% of your nest egg, and the three recent rockets are worth your consideration.
So, is it time to get into crypto? That's a decision only you can make, but these three recent rockets are worth your consideration.
- Those hoping for a more crypto-friendly SEC might find solace in the recent refocus on regulatory transparency, potentially leading to a resolution of the ongoing legal action against Ripple Labs and XRP.
- In an attempt to tap into the growing demands of the cryptocurrency market, financial services giant Blackrock suggests directing about 2% of a long-term investment portfolio towards cryptocurrencies, with potential benefits for projects such as XRP, Stellar, and Algorand.
- Recently, the Algorand team has offered their blockchain network for use as an information-tracking platform for the Department of Government Efficiency's advisory board, arguing that their quantum-resistant cryptography makes them uniquely suited for this task.
- The cryptocurrency market is still in its infancy, with the regulatory and legal frameworks involved in trading and owning digital assets still under development, but this has not deterred investors from seeing potential growth in projects such as Algorand, Stellar, and XRP.