The crypto market was on fire again this week and Bitcoin passing $100,000 was one of the biggest news items of the week. But it didn’t drive all of the trading that took place.
According to data provided by S&P Global Market Intelligence, Tron (TRX 0.68%) is up 56% over the past week, XRP (XRP 5.54%) has jumped 37%, and Hedera (HBAR 16.97%) is up 73% — and there are some strange moves in that group.
The Trump trade in crypto
Tron is up in part because Justin Sun, Tron’s founder, invested $30 million into World Liberty Financial, a cryptocurrency project from President-elect Donald Trump. World Liberty Financial isn’t technically a project Trump runs, but he has received part of the 22.5 billion tokens distributed by the company and “will be entitled to receive 75% of net protocol revenues,” according to the company.
Sun was sued by the Securities and Exchange Commission (SEC) in 2023 for selling unregistered securities and “wash trading,” among other things. So, investors are betting the World Liberty Financial deal ends up helping Tron, but it’s likely the payout will be challenged given the obvious conflicts of interest.
Ripple’s rip higher
One of the hottest cryptocurrencies since the election has been XRP, which was one of the early targets of the SEC in crypto. It’s been riding the Trump wave higher, but this weekend that could get a boost.
Ripple CEO Brad Garlinghouse is due to appear on 60 Minutes this weekend to discuss the industry’s future and that will at least bring some attention to crypto. XRP is the biggest beneficiary but it’s also not clear how long-term value will accrue to the token.
Hedera’s run continues
Hedera has been one of the hottest tokens in the world, but this week it got a boost when it was listed on Bitget’s Innovation and Layer1 Zone. Bitget may not be a household name in the U.S., but it’s one of the largest crypto exchanges in the world, doing about as much volume each day as Coinbase Global.
Hedera’s blockchain is intended to be used for financial transactions, a great use case for the blockchain, which is one of the reasons it’s gotten so much attention lately.
The crypto bull run continues
Speculation is running rampant in crypto and this week was no different. There’s no doubt the new administration is a reason to be bullish on crypto in general, but I don’t think the momentum will last unless there’s a fundamental reason value will accrue to the tokens being traded.
For example, in financial markets, the blockchain may be used to denote ownership of an asset, but it’s likely the medium of exchange (what’s used to buy and sell assets) will be stablecoins, not cryptocurrencies like XRP or Hedera. Those will be native tokens used to pay blockchain fees, but not by traders.
And that’s ultimately why I think this speculative run will end. Fundamental value is needed to generate value for these assets and most crypto tokens aren’t going to generate value, so they’ll eventually fall by the wayside.
Travis Hoium has positions in Coinbase Global. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, and XRP. The Motley Fool recommends Hedera Hashgraph. The Motley Fool has a disclosure policy.
