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3 Reasons Bitcoin Could Outperform XRP (Ripple) and Ethereum Over the Next Year | The Motley Fool

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3 Reasons Bitcoin Could Outperform XRP (Ripple) and Ethereum Over the Next Year | The Motley Fool

The dominant cryptocurrency could find a lot of new buyers in this investment environment.

When it comes to cryptocurrency, one name stands out above the crowd: Bitcoin (BTC -0.28%). The original cryptocurrency accounts for roughly 63% of the entire crypto market cap.

However, Bitcoin is so big that it doesn’t always produce the best returns. More recently, XRP (XRP -0.51%) has gotten a lot of attention as regulatory pressure eases on the company, and its utility has gotten a major boost from several advancements from Ripple. Meanwhile, Ether (ETH 0.33%) is often seen as the backbone of DeFi, with its smart contract blockchain doing most of the heavy lifting in the industry.

While there’s a case to be made for either to outperform Bitcoin, I think Bitcoin will ultimately outperform amid the current environment. Here are three reasons why investors should consider the king of cryptos.

Image source: Getty Images.

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1. The flight to quality

President Donald Trump has quickly and aggressively enacted wide-reaching tariffs on just about everything imported into the United States since taking office in January. Not only has he announced massive potential tariffs on imports, he’s also paused them, said he will carve out exceptions, and unpaused certain tariffs.

All of this leads to massive amounts of uncertainty in the market. It’s hard to know what to do with your money if the playing field could completely change tomorrow.

When markets are uncertain, they sell off riskier assets. That’s certainly true of the entire cryptocurrency market, and Bitcoin hasn’t been immune.

However, of all the cryptocurrencies investors could buy, Bitcoin is the highest-quality investment. It has significant institutional backing and a lot of big stakeholders, and the U.S. government now holds Bitcoin as part of its strategic cryptocurrency reserve. Investors selling risky altcoins are likely to move their money to Bitcoin.

As such, it’s no surprise that Bitcoin has held up better than either XRP or Ethereum in the last few months. I expect that will continue to be the case as long as the macroeconomic environment remains uncertain.

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2. Investors pulling money out of the U.S. markets

Since Trump’s tariff announcement, we’ve seen both U.S. stocks and U.S. debt decline in value. That’s not typically how it works. Remember, investors usually move from risky assets (stocks) to safer assets (Treasuries). However, the decline in Treasuries suggests investors are completely abandoning U.S. markets instead of shifting from risky assets to safer assets.

Those investors will be looking for a safe asset to buy. Foreign debt could be an option; gold is another, but Bitcoin presents an interesting case as well. That’s particularly true as a result of a second-order effect from the mass exodus from U.S. securities. The U.S. dollar has grown significantly weaker in the last few weeks.

The U.S. Dollar Index has fallen more than 10% since Trump took office in January. The dollar weakened considerably after the tariffs were announced on April 2, and it failed to bounce back after Trump announced a pause on those tariffs. When the U.S. dollar weakens, it typically results in higher pricing for Bitcoin.

3. Inflation could push the price higher

Bitcoin is seen as a hedge against inflation. Most economists agree the tariffs will be inflationary.

That only makes sense. An escalating trade war with taxes on every import, from manufacturing equipment to parts to final products, will have a huge impact on the final price of goods. Combine that with the weakening U.S. dollar, and we’ll see massive inflationary pressure.

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Since Bitcoin has a fixed supply, a dollar that can buy less will theoretically apply to Bitcoin as well. That means the price of Bitcoin will go up.

The economics of Bitcoin don’t exist in a vacuum, though. The three factors outlined here, all fallout from Trump’s tariffs, point to Bitcoin performing relatively well compared to other cryptocurrencies and other assets in general. The longer the macroeconomic environment remains uncertain, the longer the trade war goes on, the more money we’ll see flow into Bitcoin compared to other cryptocurrencies. As such, investors may see Bitcoin’s dominance of the market extend even further over the coming months.

Adam Levy 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.

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Crypto

Visa Targets Banks and Fintechs With Stablecoin Advisory Launch as Adoption Pressure Tightens

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Visa Targets Banks and Fintechs With Stablecoin Advisory Launch as Adoption Pressure Tightens
Visa is moving deeper into stablecoin-powered payments as adoption surges, launching a new advisory practice to help banks, fintechs, and enterprises design, assess, and deploy stablecoin strategies across global payment and treasury operations.
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1 Top Cryptocurrency to Buy Before It Soars Over 1,000%, According to Bernstein | The Motley Fool

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1 Top Cryptocurrency to Buy Before It Soars Over 1,000%, According to Bernstein | The Motley Fool

Bitcoin’s price dip has not deterred Bernstein analysts.

Cryptocurrency investors are understandably nervous as Bitcoin (BTC 4.08%) has fallen around 20% in the last three months. Some fear this could be the start of another crypto winter, but analysts at Bernstein remain optimistic. The brokerage recently predicted that Bitcoin will rally in the coming two years. It also reiterated its price target of $1 million by 2033. With the lead crypto hovering around the $90,000 mark, that suggests an upside of over 1,000%.

Today’s Change

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$85646.00

Cryptocurrencies are volatile assets, and unfortunately, huge price swings come with the territory. Bernstein’s targets are a timely reminder to focus on the long-term horizon, which could bring dramatic growth.

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Image source: Getty Images.

Why Bernstein remains bullish on Bitcoin

Bernstein had originally forecast that Bitcoin could reach $200,000 this year. The recent slump has poured cold water on that projection. Now, the analysts predict that Bitcoin will reach $150,000 by the end of next year and push on to $200,000 in 2027.

Continued institutional demand plays a key part in the firm’s belief that Bitcoin could reach $1 million by 2033. Bernstein points out that spot Bitcoin ETF outflows have been minimal in recent months, despite the extreme price correction. It argues that panic selling by retail investors is being offset by institutional buying.

Perhaps most importantly, Bernstein argues that Bitcoin has moved beyond its four-year Bitcoin halving cycle. Roughly every four years, the Bitcoin mining rewards get halved. It’s built into the programming as a way to control supply. In each of the previous cycles, Bitcoin’s price has risen to new highs in the 12 to 18 months after the halving.

  • 2016 halving: Bitcoin set a new all-time high in December 2017.
  • 2020 halving: Bitcoin set two new highs in April and November 2021.
  • 2024 halving: Bitcoin set new highs in December 2024 and October 2025.

If the pattern holds, we could expect Bitcoin’s price to trend downward next year, having peaked in October. The very expectation of a slump is one of the factors behind faltering investor sentiment. However, Bernstein is one of several crypto analysts who think we’re entering new territory.

It joins leading institutions, including Ark Invest and Grayscale, in saying that Bitcoin will break away from its old cycles. Rather than a prolonged winter, they argue 2026 could bring new highs. The logic is that Bitcoin has matured, attracting significant institutional funds. Plus, next year may bring further rate cuts and regulatory clarity.

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Bitcoin predictions are not set in stone

Price predictions are useful, especially when they come from established financial institutions. Even so, I’d take them with a grain of salt. This is still a relatively new and fast-changing industry, and there are too many moving parts to give more than a best guess. Case in point: Bitcoin is a long way from the $200,000 that Bernstein originally predicted for 2025.

Plus, those optimistic price targets only tell part of the picture. Analysts zoomed in on the stabilizing effect of institutional investors, which is just one of several possible growth drivers for the lead crypto. Others, such as its potential as a form of digital gold, are becoming harder to believe. For example, Bitcoin’s recent volatility undermines its safe-haven asset credentials. It has some of the traits of gold, but it doesn’t yet work as a store of value.

Similarly, in November, Ark Invest’s Cathie Wood slashed her price target for Bitcoin. She told CNBC that the rapid growth of stablecoins and their use in emerging markets eats into a role the firm thought Bitcoin would play. That said, her long-term conviction is still extremely bullish — to her, Bitcoin is a whole new monetary system, and we’re only just beginning to see what it might do.

The idea of an asset growing from $90,000 to $1 million in eight years is extremely attractive. It may happen — Bitcoin has gained over 400% since December 2017. However, it is an ambitious target, and that level of potential growth comes with corresponding levels of risk. Only allocate a small percentage of your portfolio to cryptocurrencies. That way, you benefit if Bitcoin goes to the moon, without risking your financial security if it falls to the gutter.

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Standard Chartered and Coinbase Expand Institutional Crypto Rails as Banking and Exchange Infrastructure Lock in

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Standard Chartered and Coinbase Expand Institutional Crypto Rails as Banking and Exchange Infrastructure Lock in
Standard Chartered and Coinbase are pushing institutional crypto adoption forward by expanding a global digital asset partnership, signaling deeper integration between regulated banking infrastructure and crypto-native platforms as institutional demand accelerates.
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