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Cryptocurrencies jumped on Thursday as investor appetites shifted to smaller, higher-risk coins ahead of President-elect Donald Trump’s inauguration.
XRP and litecoin were among the biggest movers, growing 13% and 22%, respectively, according to Coin Metrics. The CoinDesk 20 indexa broad measure of the crypto market, gained almost 5%.
Meanwhile, bitcoin up less than 1% near $100,000, after a two-day rally of about 7% this week. Ether fell almost 3% on Thursday.
“Small investors [are] looking for opportunities as a new pro-crypto administration prepares to step in,” Alexander Blume, CEO of advisory firm Two Prime Digital Assets, told CNBC. “The Trump administration is a rising tide that will lift all ships in crypto and altcoins are seeing some early gains from this.”
Trump’s inauguration is scheduled for Monday.
Trading platform operators Coinbase and Robinhood each rose approximately 2%. MicroStrategywhich trades as a bitcoin proxy, rose less than 1%.
“The first 50 days of Trump’s presidency will determine the trajectory of bitcoin in 2025,” said Gracy Chen, CEO of crypto exchange Bitget. “Crypto market expectations for his inauguration and first steps as president are extremely high, confirming the sensitivity of crypto market prices to his statements and appointments in the fourth quarter of 2024.”
During his campaign, Trump promised to install a crypto advisory council within his first 100 days in office and replace Securities and Exchange Commission Chairman Gary Gensler, who became a prominent opponent of the industry during his tenure. The CoinDesk 20 advanced 98% in the month following the November election. In the same period, bitcoin achieved a growth of 46%.
Another thing driving the action in small-cap cryptocurrencies is the possibility that the government’s “anticipated strategic reserve may include other ‘US’ cryptocurrencies,” like XRP and Saltworks token, Blume said.
“This is unlikely, [but] it comes as a surprise and encourages speculators to buy the coins,” he said. “The best long-term value for investors will continue to be bitcoin.”
Trump also promised to establish favorable regulation to encourage domestic “made in USA” bitcoin mining and launch a strategic national bitcoin reserve. Investors expect the volatility of this year’s leading cryptocurrency, bitcoin stuck in a tug of war between investors’ concerns about rising inflation under Trump and their optimism about his pro-crypto leadership.
