The overall cryptocurrency market has climbed 24% since the presidential election in November. Donald Trump embraced digital assets during his campaign and, while upward momentum has stalled in recent weeks, some Wall Street experts still anticipate big gains in XRP (CRYPTO: XRP) and Bitcoin (CRYPTO: BTC).

Dom Kwok, former Goldman Sachs employee and co-founder of blockchain education company EasyA, earlier this year said XRP had a good shot at replacing Ethereum as the second most valuable cryptocurrency. As of Feb. 27, Ethereum has a market value of $282 billion, while XRP has a market value of $128 billion. So, Kwok's prediction currently implies at least 120% upside in XRP.

Tom Lee, managing partner and head of research at Fundstrat Global Advisors, late last year said Bitcoin could exceed $250,000 in 2025 as spot Bitcoin exchange-traded funds (ETFs) and the incoming presidential administration help legitimize the cryptocurrency. As of Feb. 27, Bitcoin trades at $86,000, so his prediction implies 190% upside.

XRP: 120% implied upside

XRP is the native cryptocurrency on the Ripple blockchain, a platform built for cross-border payments and foreign currency exchanges. Most international payments are currently routed through the SWIFT (Society for Worldwide Interbank Financial Telecommunications) system, but the process often involves intermediaries that make transactions costly and time consuming.

Ripple designed what it believes is a better system. Its blockchain uses the XRP token as a bridge currency to enable faster, less expensive payments. While fewer than 200 financial institutions currently use the platform, adoption could increase when the lawsuit with the Securities and Exchange Commission (SEC) has been completely resolved.

To elaborate, the SEC sued Ripple in 2020, alleging it sold XRP as an unregistered security. In August 2023, a U.S. district judge issued a split decision, ruling certain transactions were exempt but others should have complied with securities laws. The result was a $125 million fine for Ripple, far less than the $2 billion the SEC wanted. But the SEC has since appealed the decision.

Importantly, Ripple recently introduced a stablecoin called Ripple USD (RLUSD). Its value is tied to the U.S. dollar, providing enterprises with a less volatile means of transacting on the Ripple blockchain. However, the stablecoin should still boost demand for XRP because the native cryptocurrency will be used to pay fees on RLUSD transactions.

Finally, several asset managers have submitted applications to the SEC to create spot XRP ETFs. Those funds would offer XRP exposure without the hassle and high fees associated with cryptocurrency exchanges. Bitcoin has gained more than 80% since the SEC approved spot Bitcoin ETFs in January 2024, and XRP could generate similar returns.

 A rout in Bitcoin deepened on Friday as investors rushed to safe assets in the wake of US President Donald Trump’s latest tariff threats, marking a dramatic reality check for one of the most popular Trump trades.

The cryptocurrency tumbled as much as 7.2% on Friday to the lowest since early November and is down some 27% since it hit an all-time high less than six weeks ago. The selloff came amid a broad plunge in cryptocurrencies, with Ether, Polkadot and XRP all dropping more than 7% on Friday.

“The last time we saw sentiment like this was 2022,” said Caroline Bowler, chief executive officer of BTC Markets Pty Ltd, referring to the “crypto winter” when prices plummeted amid rising interest rates and industry woes. “This tanking can be viewed as a response to macro fears on Trump’s tariffs and geopolitical uncertainty.”

Trump said Thursday that 25% tariffs on Canada and Mexico would come into force from March 4, undermining hopes he might reverse course after a previous delay. He also said Chinese imports would face a further 10% levy, prompting officials in Beijing to promise “all necessary measures” in response.

The focus on trade tensions led to a broad risk-off decline across markets on Friday, pushing down almost all Asian stock markets and fueling declines in European futures. But cryptocurrencies — which are deeply exposed to shifts in risk appetite — were among the worst hit.

Bitcoin has now fallen more than 20% in February. If the decline holds through the end of Friday, it would mark the biggest monthly drop since June 2022.

Trump Trade Woes

The selloff underscores a swift change of fortunes for what was previously one of the most popular Trump trades in global markets: buying Bitcoin on the expectation that the president’s crypto-friendly approach would lead to a broad rally.

That worked for a while. Bitcoin hit its all-time high of $109,241 on Jan. 20, the day of Trump’s inauguration. But cryptocurrencies have recently come under pressure amid worries that Trump’s pugilistic approach to global trade could lead to broad pain.

“Given the macro environment, it’s not surprising to see we are where we are,” said Stefan von Haenisch, director of over-the-counter trading in Asia Pacific at crypto custody firm Bitgo Inc. Traders are still waiting for Trump to come up with concrete steps for the sector including a Bitcoin stockpile, he said.

China has vowed to take all necessary countermeasures after U.S. President Donald Trump announced a fresh 10% tariff hike on Chinese imports.

CNBC reports that this latest escalation in the ongoing trade dispute between the world’s two largest economies has raised concerns over global market stability and potential economic ramifications.

The Chinese Ministry of Commerce, in a statement released on Friday, expressed firm opposition to the U.S. decision, warning of potential retaliatory measures.

“If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests,” the Ministry stated, according to a CNBC translation. 

The statement further urged Washington to reconsider its approach, emphasizing the importance of resolving conflicts through dialogue based on equality.

“We urge the U.S. side to not repeat its own mistakes, and to return as soon as possible to the right track of properly resolving conflicts through dialogue on equal footing.” 

Timing and Implications 

• The new tariffs, set to take effect on March 4, will coincide with the start of China’s annual parliamentary meetings, a period of heightened economic and political discussions in Beijing.
• These additional duties follow an earlier 10% tariff imposed by Trump on February 4, bringing the total tariff increase to 20% within a month.
• Trump justified the decision by citing China’s alleged role in the fentanyl crisis. The synthetic opioid, whose precursors are largely produced in China and Mexico, has been responsible for tens of thousands of overdose deaths in the U.S. annually.

Potential Chinese Retaliation 

Economic analysts predict that China’s response will include higher tariffs on select U.S. imports, placing more American firms on its unreliable entity list, and possibly tightening export controls on critical minerals, a sector where Beijing holds significant leverage.

Neil Thomas, a fellow on Chinese politics at the Asia Society, noted that while Beijing’s reaction may be measured, it is expected to target strategic sectors.

“In the short term, China’s response will likely include raising tariffs on select U.S. imports, adding more American firms to its unreliable entity list, and potentially further tightening export controls on critical minerals,” Thomas said. 

Alfredo Montufar-Helu, head of the China Center at The Conference Board, added that China’s response could be strategically designed to impact industries that are important to Trump’s voter base, keeping the door open for further negotiations.

He said China would prefer to leave some room for further negotiations as it hopes to avoid even higher import tariffs and other ‘corrective’ measures by Washington.

Previous Retaliatory Measures 

China has a track record of targeting U.S. industries in retaliation to tariff hikes. Following the February 4 tariffs, Beijing responded by increasing duties on certain U.S. energy imports and placing two American firms on its unreliable entity list, limiting their ability to conduct business in China.

Additionally, China has increased restrictions on exports of critical minerals essential for U.S. industries, a move that could severely impact supply chains.

Stephen Olson, a visiting senior fellow at the Institute of Southeast Asian Studies and a former U.S. trade negotiator, highlighted the significance of China’s control over essential raw materials.

“The sharpest arrow that China has in its quiver would be to restrict U.S. access to critical minerals that can’t readily be sourced elsewhere,” Olson remarked. 

The trade war escalation has raised concerns about potential disruptions in global supply chains and economic growth. China’s exports have remained a rare bright spot in its otherwise slowing economy, and with the U.S. being its largest single-country trading partner, both nations have a vested interest in preventing further economic downturns.

[Nairametrics]