These Cryptocurrencies Have Seen a Massive Post-Election Boost. Can They Maintain That Momentum?

Financial markets have been soaring since November's elections. The S&P 500 stock market index is up by 5% from election day to February 10. Leading cryptocurrencies Ethereum (CRYPTO: ETH) and Bitcoin (CRYPTO: BTC) gained 10% and 42%, respectively, over the same period.

But that's nothing compared to the crypto sector's biggest post-election winners. Let's see why Algorand (CRYPTO: ALGO), Stellar (CRYPTO: XLM), and XRP (CRYPTO: XRP) showed market-crushing results in recent months -- and where they might go from here.

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XRP Price data by YCharts

Algorand's governmental hopes

Algorand initially soared when the recently confirmed Trump administration said it would cancel capital gains taxes on cryptocurrencies with American headquarters. That idea includes Algorand, whose governing foundation is based in Boston, Mass.

More recently, the Algorand team has volunteered its blockchain network as an information-tracking platform for the newly created Department of Government Efficiency advisory board. The team argues that its quantum-resistant cryptography makes it uniquely suitable for this task.

Stellar's twist on the Washington upside

Stellar followed a similar path to its current perch. It's another mostly American project with headquarters in San Francisco, so it may be subject to the same tax-friendly treatment as Algorand.

On top of that, the Federal Reserve put Stellar on the short list of crypto options for its upcoming FedNow payment system. Stellar is not the only name under consideration, but this could be a big win for a relatively small player in the crypto market.

XRP may get to leave the courtroom in 2025

Finally, XRP investors have been looking for a more crypto-friendly version of the Securities and Exchange Commission (SEC) since December 2000, when that agency filed a lawsuit against the underlying Ripple Labs organization. The XRP team has been faring well in recent turns of that legal action, but the SEC still insists on filing appeals.

A Trump-flavored update to the SEC may change that in a hurry. Acting chairman Mark Uyeda has refocused the agency's crypto attitude from enforcement to regulatory transparency. The XRP community is looking forward to the end of appeals and refilings under this regime.

Oh, and XRP is another cryptocurrency with deep American roots. Stellar is an offshoot of the same organization with similar long-term goals, founded by a former Ripple/XRP developer. Their headquarters are half a mile apart in San Francisco's financial district. Ergo, XRP could benefit from lower capital gains taxes if the Trump administration implements that policy suggestion.

The crypto world's growing pains

These cryptocurrencies are soaring for good reason. They also seem to have room for continued growth.

The cryptocurrency market is still in its infancy. The regulatory and legal frameworks involved in trading and owning them is still under development. And most Americans may have heard of these digital assets by now, but very few people own any -- or plan to buy crypto in the near future.

Fool Money's annual cryptocurrency poll recently showed that people who haven't tried owning crypto aren't likely to take that step. 93% of respondents who currently own cryptocurrencies are at least "somewhat likely" to buy more in 2025. That cohort drops to 16% when you look at people who have never owned crypto before.

That could change in the next few years as traditional financial advisors are starting to take these digital assets more seriously.

Is it time to get into crypto?

Financial services powerhouse Blackrock (NYSE: BLK) suggests directing about 2% of your long-term investment portfolio toward cryptocurrencies, up from absolutely nothing in 2023. The 500 largest investment managers in the world have about $128 trillion of assets under management, according to commercial insurance giant WTW. Moving 2% of that wealth into the crypto market would nearly double the market's overall size, not accounting for the swell of public interest that would follow.

XRP, Stellar, and Algorand should benefit from a generally larger cryptocurrency market. Moreover, each project has specific qualities and long-term goals. XRP could be a giant of international payments in the long run. Stellar wants to manage local payments, too. Algorand has lots of decentralized finance apps under development, hoping to find a killer app one of these days.

I'm not saying that any of these altcoins will eclipse Ethereum and Bitcoin in the long run, or that you should go all-in on any cryptocurrency. But this exciting sector might deserve 2% of your nest egg, and the three recent rockets are worth your consideration.

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Anders Bylund 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.