Even with some recent turbulence to start 2025, cryptocurrencies have soared this year. The price of Bitcoin, the world's largest cryptocurrency, surpassed $109,000 at one point and has regularly hovered around $100,000 since the end of last year.
President Donald Trump's victory in November sent the sector up, up, and away as investors got bullish about the chances for a lighter and more friendly regulatory environment that seeks to make the U.S. the crypto capital of the world.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
So far, Trump has lived up to that promise, implementing pro-crypto officials and ordering a working group to explore the possibility of a U.S. strategic Bitcoin reserve. Here are my three crypto predictions for 2025.
I expect the relaxing of regulations and a pro-crypto administration to make accessing cryptocurrencies easier than ever before. There are plenty of ways investors can easily buy them already through platforms like Coinbase Global.
And the Securities and Exchange Commission (SEC) has approved Bitcoin and Ethereum spot exchange-traded funds (ETFs). Using these funds and platforms like Coinbase is a lot easier than getting your own digital wallet and trying to remember long passphrases to store and access your tokens.
Many brokerages, like Robinhood Markets, offer cryptocurrencies but in a much more limited way. An ongoing debate between the SEC and crypto proponents is whether digital coins should be treated as securities or currencies.
Many of them are currencies, but most are also traded as speculative assets. Being deemed a security would come with oversight from the SEC and many strict securities laws. Exchanges like Robinhood slowly rolled out new cryptocurrencies on their platforms during Joe Biden's administration because they didn't want to get caught listing an unregistered security.
Under the Trump administration, I expect popular retail brokerages like Robinhood and potentially SoFi Technologies to offer a wide array of cryptocurrencies. I also think more cryptocurrencies will get their own ETF listings.
Lastly, with the removal of the SEC's Staff Accounting Bulletin (SAB) 121, which required financial institutions to account for crypto assets in custody on their balance sheets, more financial institutions will be able to offer custodian services and interact more with crypto. SAB 121 led to higher capital and liquidity requirements for banks.
One of the best-performing cryptocurrencies since Trump's election win is XRP (CRYPTO: XRP), the third-largest cryptocurrency by market cap. It had struggled since the SEC sued Ripple, the company behind the cryptocurrency, and two of its founders for allegedly selling XRP as an unregistered security starting in 2013.
XRP price data by YCharts.
In July 2023, a federal judge essentially sided with the defendants, ruling that XRP was an investment contract when sold to institutional investors but not when sold to retail investors, because these investors generally didn't know they were purchasing them from Ripple. However, the SEC appealed this decision, and the case is ongoing.
All of this happened while Gary Gensler led the SEC and the case against Ripple. Gensler has now stepped down, and Trump has nominated former SEC commissioner and crypto proponent Paul Atkins, who is the head of a consulting firm that helps clients navigate the crypto and financial sectors. Atkins may not be confirmed for a few months, and it's uncommon for the head of the SEC to drop a major case, but I believe he will take steps to end the appeal sometime this year.
As part of his many executive orders, Trump tasked a working group with drawing up broad crypto regulations the entire industry could follow. Proponents argue that there hasn't been clear crypto regulation, making it difficult to be in compliance and move forward with their businesses and ventures.
Trump has already named the prominent venture capitalist and former PayPal executive David Sachs to lead the White House on artificial intelligence and crypto regulations. Coinbase's chief policy officer, Faryar Shirzad, told CNBC in December that he thinks Congress could move fast on crypto regulation including the creation of a broad range of rules to govern the industry. He called the new Congress "the most pro-crypto Congress ever."
Passage of clear and far-ranging regulations will pave the way for brokerages to offer many more cryptocurrencies, make stablecoins more mainstream, lead to new ETFs, and allow financial institutions to interact and offer crypto services.
It would also likely clarify which agencies oversee crypto. Most proponents would like it to be regulated as a currency under the Commodity Futures Trading Commission, so they can avoid more-stringent securities laws. It will be interesting to see what gets passed, but I think it will clarify many gray areas.
Before you buy stock in XRP, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $788,619!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
Learn more »
*Stock Advisor returns as of February 3, 2025
Bram Berkowitz has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Ethereum, PayPal, and XRP. The Motley Fool recommends the following options: long January 2027 $42.50 calls on PayPal and short March 2025 $85 calls on PayPal. The Motley Fool has a disclosure policy.