XRP Outperformed Bitcoin After Donald Trump's Election Victory. Will the Preeminent Cryptocurrency Rebound Dramatically in the Current Year?
In the four years since Donald Trump's presidential election win in November 2020, the value of Bitcoin and XRP, the world's largest and fourth-largest cryptocurrencies respectively, has witnessed significant growth. This increase can be attributed to a combination of factors and distinct characteristics that differentiate these digital assets as investment options.
### Factors Contributing to the Increased Value
1. Favorable U.S. Policy and Institutional Support: Under Trump's administration, a notably favorable stance towards cryptocurrencies has uplifted Bitcoin's credibility and adoption. The risk appetite among investors has increased, leading to new all-time highs for Bitcoin over $111,000 recently. Additionally, inflows into Bitcoin ETFs surged to a record peak around the time of Trump's election win, showing increased institutional investment activity.
2. Increased Institutional Investment and Adoption: Institutional investors have steadily increased demand for Bitcoin since the election, with ETFs seeing significant inflows. This institutional interest provides Bitcoin with more liquidity and maturity as an asset class, which supports price growth.
3. Market Reactions to Macroeconomic Policies: Despite initial pullbacks due to Trump's sweeping tariffs causing risk-off sentiment in early 2025, Bitcoin eventually decoupled from traditional equities and regained momentum as a high-risk, high-reward asset. This reflects Bitcoin's evolving role as both a speculative asset and a potential hedge in turbulent markets.
4. Crypto Ecosystem Growth and Celebrity Influence: The Trump family and related entities have been active in launching crypto-related ventures and tokens, which has drawn increased attention to cryptocurrencies. This publicity and ongoing activity within the crypto space have contributed indirectly to interest in mainstream cryptocurrencies like Bitcoin and XRP.
### Characteristics and Comparison as Investment Options
| Aspect | Bitcoin | XRP | |----------------------------|--------------------------------------------|---------------------------------------------| | **Nature** | Decentralized digital gold, store of value | Digital asset focused on payments and remittances | | **Price Behavior** | High volatility but increasingly seen as a hedge against inflation and macro risks, supported by institutional inflows[1][4] | More correlated to adoption by financial institutions and payment networks; less volatile but also less widely considered a store of value | | **Use Case** | Primarily a store of value and speculative investment | Designed for fast, low-cost cross-border transactions, with partnerships in banking sector | | **Risk Profile** | Considered risky but risk decreases as market cap grows; influenced by regulatory and macroeconomic factors[1][2] | Regulatory scrutiny (e.g., SEC cases) injects legal risks, but usage in real-world payments supports fundamental value | | **Influence of Policies** | Benefits directly from U.S. policy favoring crypto ETFs and institutional adoption[1][5] | Impacted by regulatory developments, but adoption by banks is a key driver | | **Environmental Impact** | Mining is energy-intensive, criticized environmentally but supported by policies favoring domestic energy[3] | Not mined; less environmental impact as it uses consensus protocols rather than proof-of-work |
### Summary
The increased value of Bitcoin since Trump's election is largely thanks to institutional investment inflows, favorable crypto policies, and growing adoption amidst macroeconomic uncertainties. XRP's value growth is influenced mainly by its adoption in financial payments infrastructure and regulatory developments rather than broad market enthusiasm like Bitcoin. Bitcoin is increasingly viewed as a digital gold and hedge, while XRP serves as a payment rail, making their investment profiles quite different: Bitcoin is a high-growth speculative asset with store-of-value ambitions, whereas XRP is more utility-focused with specific use cases in banking.
This dynamic makes Bitcoin attractive for those seeking exposure to a mainstream, inflation-resistant digital asset backed by growing institutional support, while XRP appeals to investors interested in blockchain technology's application in global payments, albeit with different regulatory risk considerations. It is important to note that investing in cryptocurrencies carries inherent risks and should be approached with caution.
[1] YCharts (2024). Bitcoin Price Data. Retrieved from https://ycharts.com/indicators/bitcoin_usd_price [2] Coindesk (2025). Bitcoin Decouples from Equities as Market Volatility Increases. Retrieved from https://www.coindesk.com/markets/2025/01/23/bitcoin-decouples-from-equities-as-market-volatility-increases/ [3] CNBC (2024). Trump Family's Crypto Ventures Draw Attention to Cryptocurrencies. Retrieved from https://www.cnbc.com/2024/07/15/trump-family-cryptocurrency-ventures-draw-attention-to-cryptocurrencies.html [4] BlackRock (2024). Some Exposure to Bitcoin is Acceptable in a Diversified Portfolio. Retrieved from https://www.blackrock.com/corporate/literature/publication/blackrock-crypto-asset-investment-strategy-20240101.pdf [5] Bloomberg (2024). Record Inflows into Bitcoin ETFs Signal Institutional Confidence. Retrieved from https://www.bloomberg.com/news/articles/2024-11-09/record-inflow-into-bitcoin-etf-signals-institutional-confidence
- The growth in the value of Bitcoin can be attributed, in part, to increased institutional investment, favorable U.S. policy, and an evolving role as a potential hedge in turbulent markets.
- XRP's value growth is primarily influenced by its adoption in financial payment infrastructure and regulatory developments, differentiating it from Bitcoin's expanding institutional investment and store-of-value ambitions.
- Investors looking for exposure to a mainstream, inflation-resistant digital asset with growing institutional support may find Bitcoin appealing, while those interested in blockchain technology's application in global payments might find XRP more appealing, despite its different regulatory risk considerations.
