Here's Why Ethereum, XRP, and Shiba Inu Are Rising to Start 2025

After struggling to end 2024, cryptocurrencies were green to start 2025, as exuberance around the sector is back on tap from several sources. Treasury yields also dipped this morning, typically a good sign for crypto.

The price of the world's second-largest cryptocurrency, Ethereum (CRYPTO: ETH), had risen 4% from late afternoon yesterday, as of 10:58 a.m. ET. The price of XRP (CRYPTO: XRP) and Shiba Inu (CRYPTO: SHIB) traded 4.3% and 5.4% higher, respectively.

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Excitement to kick off 2025

Since President-elect Donald Trump won the election in early November, crypto prices have soared. The market cooled off during the last few weeks of the year, but the excitement seems to once again be building.

The price of the world's largest cryptocurrency, Bitcoin (CRYPTO:BTC), a bellwether for the industry, jumped back over $96,400, and many experts and analysts see much more to come in 2025. The investment bank H.C. Wainwright recently issued a report saying Bitcoin can more than double again this year and hit $225,000, an increase from its previous price target of $145,000.

A big reason for Wainwright's optimism has to do with a more favorable regulatory landscape under the Trump administration, which includes the passage of several key bills in Congress that will lead to more institutional adoption. One bill Wainwright is optimistic about is the Financial Innovation and Technology for the 21st Century Act. This bill, which the U.S. House of Representatives passed in mid-2024, would provide a set of standards to determine whether a cryptocurrency is a security or commodity, one of the great debates in crypto right now.

The SEC has claimed that many cryptocurrencies traded as speculative assets should be treated as securities, and therefore subject to securities laws. Crypto proponents would prefer cryptocurrencies to be deemed a commodity and overseen by the Commodity Futures Trading Commission (CFTC). This law would at the very least set parameters, that would help a lot of financial institutions and brokerages better determine which cryptocurrencies are and are not securities.

Additionally, the BlackRock Bitcoin ETF (NASDAQ: IBIT) secured over $37 billion of assets in its first year of trading, making it a top three ETF in 2024. More spot-crypto ETFs are expected to be adopted in 2025. Ethereum already has one, and many suspect XRP could get one as well if the SEC's lawsuit against the token goes away, which could happen this year.

Can crypto ride another big wave this year?

After such a big run to end 2024, there's more risk to the downside for crypto. However, it's very possible the crypto bull market still has legs. The passage of key crypto legislation will create more clarity around the sector, while more spot crypto ETFs will increase adoption among institutions and investors.

Additionally, Treasury yields and inflation could play a role. Recently, investors have grown more concerned about inflation, and Treasury yields have remained elevated. Easing inflation expectations and lower yields would likely push the crypto market higher, while the opposite could hurt crypto.

I'm bullish long term on Bitcoin and Ethereum, and think Ethereum could play a bit of catch-up to Bitcoin this year. I hold a smaller, more speculative position in XRP, but don't have an interest in Shiba Inu right now.

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Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.