Crypto Markets Rally Ahead of Trump's Inauguration, Small-Cap Coins Shine

Cryptocurrencies surged Thursday, with investors flocking to smaller, higher-risk coins in anticipation of President-elect Donald Trump's inauguration. XRP and litecoin led the charge, with gains of 11% and 20% respectively, as per Coin Metrics. The CoinDesk 20 index, a broad market benchmark, rose by 4%. Bitcoin, meanwhile, saw a modest 1% increase, trading at $100, 000 after a two-day rally of about 7%. Ether, however, dipped by 3% on the same day. The shift in investor appetite can be attributed to the expectation of a pro-crypto administration under Trump. Alexander Blume, CEO of Two Prime Digital Assets, noted that retail investors are on the lookout for opportunities as the new administration takes over. He likened the situation to a "rising tide lifting all boats" in the crypto market, with smaller coins like XRP and Solana's token seeing early gains. Trump's inauguration is scheduled for Monday, and the crypto market is buzzing with high expectations. Trading platforms like Coinbase and Robinhood also saw increases, with Coinbase adding 2% and Robinhood rising over 1%. MicroStrategy, often seen as a bitcoin proxy, also rose more than 1%.Gracy Chen, CEO of crypto exchange Bitget, highlighted that the first 50 days of Trump's presidency will be crucial for bitcoin's trajectory in 2025. The market's sensitivity to Trump's statements and appointments in the fourth quarter of 2024 is evident in the recent price movements. During his campaign, Trump promised to establish a crypto advisory council and replace the Securities and Exchange Commission chair Gary Gensler, who was seen as an industry adversary. This pro-crypto stance has driven the CoinDesk 20 index up by 98% and bitcoin by 46% in the month following the November election. The speculation that the government might include other "American" cryptocurrencies like XRP and Solana's token in its strategic reserve is also fueling the market. While this possibility is low, it has sparked a buying frenzy among speculators. Despite this, experts still believe that the long-term value for investors lies in bitcoin. Trump has also pledged to create favorable regulations for domestic bitcoin mining and establish a national bitcoin stockpile. Investors are bracing for volatility in bitcoin this year, as the cryptocurrency navigates through concerns about rising inflation under Trump and optimism over his leadership.