Arguably, the biggest beneficiary of the Trump administration's pro-crypto policies has been the cryptocurrency XRP (XRP 5.15%). On Election Day, XRP was trading for just $0.50. Today, it trades for about $2.20, for an eye-popping 345% return on investment in just six months.
While much of the early pro-crypto euphoria surrounding the Trump administration has already been priced into XRP, new catalysts continue to emerge. In fact, there are three big ones with the potential to send XRP higher over the next 12 months.
Shakeup at the SEC
President Donald Trump campaigned on a pro-business, pro-crypto platform. And that's exactly what he has delivered. One of the first moves was the replacement of Securities and Exchange Commission (SEC) head Gary Gensler, who was known for his heavy-handed approach to crypto regulation, with Paul Atkins, who is known for his support of the crypto industry.
This shakeup at the SEC is important for several reasons. For example, it led to the SEC dropping a long-running lawsuit against Ripple, the company behind the XRP crypto token. For more than four years, the SEC claimed that XRP was a security and not a commodity. That long, bruising legal battle now appears to be over.
That should free up Ripple (and XRP) to go back to expanding its business of facilitating financial transactions. Moreover, it should make it easier for Ripple to gain institutional adoption for its blockchain-based payment network, which is primarily used to send cross-border payments. As long as there was a dark legal cloud hovering over Ripple, financial institutions had to think twice about getting fully onboard with Ripple's payment technology.
U.S. Digital Asset Stockpile
In March, the White House announced the creation of both the Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile. The Strategic Bitcoin Reserve only holds Bitcoin, so it doesn't affect XRP. But the Digital Asset Stockpile would to hold all the other cryptocurrencies owned by the U.S. government, including XRP.
Image source: Getty Images.
In the days before the announcement of the U.S. Digital Asset Stockpile, Trump specifically noted that XRP was one of the four cryptocurrencies that were going to be prioritized. The high-profile inclusion of XRP came after Ripple Chief Executive Officer Brad Garlinghouse directly reached out to the White House, encouraging a broader crypto diversification away from Bitcoin.
What remains to be seen, of course, is whether the U.S. government will ever decide to buy more XRP for the stockpile. Right now, the only XRP in that would be held in the stockpile is crypto that was seized or confiscated by the government. So, from the perspective of crypto investors, it's important for the government to buy XRP. If that happens, the price of XRP could skyrocket.
New stablecoin legislation
New stablecoin legislation should be signed by the end of the summer. At first glance, this political win shouldn't have a big impact on XRP. After all, XRP is an altcoin, and not a stablecoin, right?
However, there is an indirect impact. That's because Ripple recently introduced a new dollar-pegged stablecoin, known as Ripple USD (RLUSD -0.05%), to encourage more activity on the XRP blockchain. Even though Ripple USD only launched in December, it already has a market cap of $300 million, which suggests that institutional investors are eyeing new uses for XRP.
Admittedly, there's quite a bit of debate in the crypto world about how much this new stablecoin will actually help XRP. On one hand, it should drive new transaction activity, create new use cases for XRP, and lead to greater demand for the XRP token. On the other hand, the new stablecoin might cannibalize XRP transaction activity, and lead to lower demand for the XRP token.
Potential price impact on XRP
As noted above, much of the pro-crypto euphoria that existed immediately after the 2024 election has already been priced into XRP. There's no other rational way to explain how a cryptocurrency that had seemingly flatlined at the $0.50 level suddenly skyrocketed to a 52-week high of $3.39 in mere weeks.
But there's still a lot of promising upside potential from these three new political catalysts. For example, a crypto-friendly SEC makes it much more likely that a new spot XRP exchange-traded fund will be approved by the end of 2025. And, any initiative by the Trump White House to free up non-taxpayer funds for the Digital Asset Stockpile could send XRP parabolic.
Although there's a lot to be excited about, just remember: In its entire history, XRP has never once traded higher than $4. So, while it's nice to fantasize about XRP skyrocketing in value, the most likely outcome is for XRP to double in price, to regain an all-time high of $3.84 from seven years ago.
