David Schwartz, chief technology officer at Ripple, has noted that XRP’s becoming the third-biggest cryptocurrency coincided with his officially reaching 12 years at the company. 

The XRP continued its blistering rally on Sunday, surging by more than 28%. The token has reached a new multi-year high of $2.48.

The Ripple-affiliated cryptocurrency is now in third place by market capitalization, surpassing stablecoin giant Tether (USDT) and “Ethereum killer” Solana (SOL).

It has managed to reclaim one of the top spots after coming close to dropping out of the top 10 following the SEC lawsuit against Ripple.   

Still, the controversial cryptocurrency has a long way to go to surpass Ethereum (ETH), which currently has a market cap of $444 billion. 

With its current market cap of $139 billion, XRP is bigger than such major companies as Citigroup, Airbus, and Sony. 

However, despite surging by more than 30% within 24 hours, it is not the best-performing cryptocurrency in the top 100. Hedera (HBAR) managed to outstrip it with an eye-watering 42% gain. 

Traders have also shown some love for other O.G. altcoins. EOS (EOS) and Litecoin (LTC) are both up by 20.5% and 20.2%, respectively. 

XRP has also lagged behind HBAR in terms of weekly gains (78% and 69%, respectively). 

However, the Ripple-affiliated token has another major catalyst in the offing. 

As reported by U.Today, Ripple CEO Brad Garlinghouse recently recorded an interview with “60 Minutes,” one of the most prominent TV programs in the US. 

In a recent social media post, Garlinghouse confirmed that there is no official air date yet. 

The US election results are monopolizing the debate in the crypto world. Donald Trump’s victory has taken Bitcoin to levels never seen before. In fact, for days now, a single Bitcoin is nearing $100,000, which has investors holding their breath. Other altcoins are joining in this euphoria, breaking new records. This includes Solana, as well as XRP — Ripple’s currency — which has seen triple-digit growth.

The cryptocurrency sector — already euphoric about the election of a pro-crypto president who wants to gut financial regulations — is now awaiting the materialization of the numerous promises that the Republican candidate made during the 2024 campaign.

Experts warn that it remains to be seen whether the tycoon will actually be able to honor his announcements. But, for the moment, the industry’s wishes seem to be fulfilled. SEC Chairman Gary Gensler — who has been skeptical and sometimes hostile to cryptocurrencies over the years — has already announced that he will step down as head of the securities market supervisor on January 20 at noon, just as Trump takes office. Meanwhile, the Republican recently named Scott Bessent as his nominee for the Department of the Treasury.

Bessent — in an interview with Fox Business earlier this year — said that cryptocurrencies “are about freedom and the crypto economy is here to stay. These assets are attracting young people, who haven’t participated in the [stock market].” But one of the promises that most excites the industry and investors is the possibility of creating a strategic reserve of bitcoins in the U.S. Trump mentioned this project back in June, during the Bitcoin 2024 conference held in Nashville, Tennessee. The proposal has deeply resonated with the sector.

What is a strategic bitcoin reserve?

A strategic reserve is a set of external assets that are immediately available and under the control of the monetary authorities. They’re meant to meet the financing needs of the balance of payments, or to intervene in the foreign exchange markets in order to influence the exchange rate, to name just some examples. In this way, a bitcoin reserve would be similar to the gold and foreign currency reserves held by central banks. There are also strategic reserves of basic raw materials, such as oil.

The pioneering cryptocurrencies would be incorporated into the mix of assets that the North American country has on its balance sheet, with the aim of diversifying reserves. However, the project isn’t clearly laid out and there’s still much speculation on the matter, starting with the basic question of which authority would be responsible for managing it. Would it be the Federal Reserve? Or another institution? And the no less important question concerns how to pay for it. Bitcoins could be purchased after selling off other assets — such as gold or bonds — increasing debt, or expanding the Federal Reserve’s balance sheet, an operation that is colloquially known as “printing money.”

This reserve would also include the bitcoins that the U.S. administration has seized to-date: some 208,109, worth almost $20 billion at the current market price. These include the cryptocurrencies confiscated in 2013 from Ross Ulbricht, the founder of Silk Road, a dark web that operated exclusively in bitcoin. Users would traffic drugs and hire hitmen, among other things. During the election campaign, Donald Trump promised to commute Ulbricht’s life sentence upon reaching the White House.

What does the proposal look like?

The most concrete proposal so far is that of pro-crypto Republican Senator Cynthia Lummis, who introduced her Bitcoin Act of 2024 (Boosting Innovation, Technology and Competitiveness through Optimized Investment Nationwide Act) in the Senate. This project provides for the Treasury and the Federal Reserve to buy 200,000 bitcoins each year for a period of five years, until reaching one million units. This would represent about 5% of the total global supply of bitcoins, which is around 21 million. The reserve would subsequently be maintained for a minimum of 20 years. The idea is that this reserve would serve as a hedge against the devaluation of the U.S. dollar, to strengthen national balance sheets and support future debt issues.

In the legislation, the proposed mechanism to purchase the cryptocurrency has two elements: on the one hand, the surplus that the Federal Reserve returns to the Treasury (i.e. the profits of the U.S. central banking system) would be used to buy bitcoin. On the other hand, it proposes that the central banks of each state reassess the gold certificates they hold, to better reflect the value of the metal in the current market. They must then deliver the difference to the Treasury, which will use the funds to buy bitcoin.

Noelle Achenson — author of the Crypto is Macro Now newsletter — explains that the Fed has certificates on its balance sheet that represent the gold held by the Treasury. The total valuation is approximately $10.5 billion. However, this value is based on a legal price that, since 1973, has remained constant at $42 per ounce. If valued at current prices, the stored gold would be worth about $643 billion.

Beyond the federal administration, states are also moving to have their own bitcoin reserves. Mike Cabell — a member of the Pennsylvania House of Representatives — recently introduced a bill for the creation of a strategic bitcoin reserve to allow the state treasury to invest up to 10% of its funds in bitcoin. The aim of this legislation is for the cryptocurrency to serve as a hedge against inflation. However, the details of the proposed regulations are still unknown.

What have other countries done?

El Salvador has been a pioneer in creating a strategic crypto reserve. In fact, the Central American country was the first to adopt bitcoin as legal tender in September of 2021. The government has since acquired up to 5,944 bitcoin, valued at more than $560 million at the current market price, according to the country’s Bitcoin Office. Added to this is the kingdom of Bhutan, which owns 12,218 bitcoins, valued at $1.2 billion, according to data from the firm Arkham Intelligence. The firm details that the fortune of this crypto state comes from bitcoin mining operations (taking advantage of the national orography for the generation of electrical energy) carried out by the country’s investment arm, the state-owned conglomerate Druk Holdings.

Other nations that own the pioneering cryptocurrency have mainly accumulated it through confiscations, as is the case of the United States. But beyond the North American country, other states have been collecting bitcoin in recent years. The United Kingdom, in fact, has an account with 61,245 tokens, worth more than $6 billion.

Experts also point to China as one of the largest holders of this cryptocurrency. In November of 2020, authorities confiscated 194,775 bitcoin from members of the PlusToken Ponzi scheme, a scam operating in the Asian country that promised its victims “constant” double-digit returns. The perpetrators of this scam collected cryptocurrencies worth billions of dollars, which they then used to buy properties and luxury cars for themselves or their relatives. However — according to Arkham Investments — it’s unclear whether the Chinese government still owns these seized bitcoins, or has since sold them.

What do the analysts say?

The experts consulted by EL PAÍS disagree on the possibility of this project being carried out. Luis Garvía — director of the Financial Risk graduate program at the Madrid-based Catholic Institute of Business Administration (ICADE) — is blunt: “It seems absolutely reasonable to me that any government should have a part of its reserves in bitcoin. Diversification is very important,” he emphasizes.

Carlos Salinas — a professor in the master’s degree program in Blockchain and Digital Asset Investment at the IEB — believes that the promise of creating a bitcoin reserve is one of the main drivers of the asset’s surging price. However, he doubts that the U.S. can accumulate such a large quantity of bitcoin, although he doesn’t rule it out entirely. And, if the proposed legislation indeed sees the light of day, other nations — such as Russia, China, Brazil, or India — wouldn’t want to be left out: “At the last highs of bitcoin in 2021, we saw the FOMO, but in this current bullish phase, we’re [dealing] with institutional FOMO. We don’t know how big this can become,” he warns

For his part, Javier Molina — a senior market analyst at eToro — doubts that bitcoin can ever be considered a store of value like gold, nor that there will ever be a large-scale adoption of the currency by governments, at least in the short and medium-term. “While the idea that bitcoin could one day play a role similar to that of gold as a store of value — like ‘digital gold’ — may be interesting, I think we’re still far from seeing a race for digital reserves at the government level,” he opines.

David Tercero-Lucas is a professor of Economics at ICADE. He specializes in cryptoassets and digital currencies. He highlights that, while bitcoin shares certain characteristics with traditional assets — such as gold, for example, given its scarcity and its independence from centralized entities — it lacks other essential characteristics typical of reliable reserve assets. “Gold has a millennia-old history as a store of value; it’s widely-accepted and has industrial uses that reinforce its usefulness. Currencies, such as the dollar, are backed by robust states and financial systems. Bitcoin, on the other hand, is extremely volatile and its value depends more on speculative expectations than on tangible fundamentals,” he details.

Therefore, according to this expert, selling gold to buy this cryptocurrency is risky, especially since its capacity to serve as a strategic reserve in crisis contexts has never been validated in the long-term. He also points out that the idea that this asset cannot be sold for 20 years — one of the requirements included in the Bitcoin Act — doesn’t offer financial resilience in the short-term. In fact, it contradicts the purpose of a strategic reserve, which should be available to stabilize the economy in emergency situations.

Santiago Carbó — a professor of Economics at the University of Valencia — agrees with this analysis. He warns that the proposed U.S. legislation sets a dangerous precedent: “Bitcoin has been anything but a stable value until now.” He trusts in the orthodoxy of the Federal Reserve to prevent this project from being approved, while still recognizing the growing acceptance of this cryptocurrency among investors. He also points to the lack of transparency in the crypto market, its lack of maturity and high levels of risk that make it unreliable as a reserve asset.

The expert consulted by EL PAÍS who’s most wary about the launch of a strategic reserve is Manuel Villegas, a digital asset analyst at Julius Baer. For him, there’s still a lot of noise around the idea. “The market has anticipated a lot and I think it hasn’t yet fully understood that this is [a serious] proposal. There’s a lot of speculation about what may happen. But the Federal Reserve is an independent authority and, in recent months, Jerome Powell hasn’t been very favorable to this issue,” he warns. Moreover, unlike SEC Chair Gary Gensler, the Fed chairman already made it clear at the last Fed meeting that he doesn’t intend to resign and that Trump cannot fire him.

Add to this another factor: market concentration. According to Villegas, buying 200,000 bitcoins a year in a market as illiquid as the current one could drive prices up excessively. And, on the other hand, it could concentrate a large part of the supply of this cryptocurrency in the hands of the U.S.: “It would become one of the largest holders of the asset, with 5% in reserves. [We also must add] the 3% held by MicroStrategy [which already has about $17 billion worth of bitcoin on its balance sheet] plus the holdings of Marathon and BlackRock,” he concludes.

While Bitcoin investors and the industry are rubbing their hands gleefully at the prospect of the pioneering cryptocurrency’s value skyrocketing even further, prediction markets indicate that this project won’t happen: the odds of the U.S. having its own Bitcoin strategic reserve stand at just 30% on Polymarket.

Translated by Avik Jain Chatlani.

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Analysis The 2024 presidential election tipped the United States into a new era of uncertainty, but one thing’s for sure: The crypto industry was triumphant. 

Hundreds of pro-crypto lawmakers were elected earlier this month, alongside Donald Trump’s victory in the presidential race. The cryptocurrency industry reportedly spent millions of dollars (in fiat currency, ironically) supporting candidates and platforms advocating for policies that could expand the Bitcoin-driven cryptocurrency sector.

Shortly after Trump’s election victory, Bitcoin advocates from the non-profit Satoshi Action Fund sent out an email congratulating the industry, while CEO Dennis Porter talked up legislative priorities alongside the promise that “our team will have direct lines to senior government officials” in the coming years. 

That naturally raises the question of what sort of policies the cryptocurrency world would like to see enacted in Trump’s second term behind the Resolute desk. We pinned Porter down to discuss the matter between events in his busy schedule.

Priorities in the crypto community aren’t unified, Porter told us in a phone interview. 

“You have a lot of excitement around the strategic Bitcoin reserves, but I think it’s also important that the folks in Washington, DC get some of the more basic structures across the finish line,” Porter said, referring to legislation like FIT21, which is designed in theory to place some basic regulatory structures on the crypto world and assign government bodies to manage the rules. 

Porter admitted that the Trump team hasn’t said anything about supporting market definition legislation or other basic structure rules for Bitcoin and its relatives – “but, I mean, they’ve got to be supportive of the market structural legislation,” he suggested. 

One area that Trump has expressed support for publicly is the aforementioned “strategic Bitcoin reserve” – an idea that the US federal government should invest in Bitcoin as a store of value similar to the gold reserve or other commodities. 

“There’s clear signaling from the Trump camp – which will soon be the Trump administration – that they’re very interested in this policy,” Porter observed. “Trump endorsed that type of legislation at the Bitcoin conference right after Senator [Cynthia] Lummis introduced her legislation, the Bitcoin Act of 2024.”

That Act, which hasn’t budged since being introduced in the Senate in late July, would establish a program to allow the Department of the Treasury to buy as much as one million Bitcoins over five years, with a minimum holding period of 20 years before any coins in reserve could be sold, swapped, auctioned “or otherwise disposed of for any purpose other than retiring outstanding Federal debt instruments.” 

Bitcoin dreams vs Bitcoin realities

Crypto opponent Molly White – who recently wrote about what Trump’s win could mean for the crypto industry – isn’t so sure Porter’s hopes, or the industry’s plans, match up with the reality of crypto’s history. 

“There’s this industry talking point that, you know, we just want clear, responsible regulation,” White told The Register. “That’s pretty much the line you’ll get from anyone who’s working on this stuff.

“When you actually look at what they have supported in the past and how they have reacted to various proposals that would add more clarity or define stuff, the crypto industry basically unilaterally opposes it,” White added. 

White cited FIT21 as an exception to the crypto industry’s general opposition to regulation, but noted a significant caveat: the bill reduces the Securities and Exchange Commission’s (SEC) authority over cryptocurrencies. It does so by excluding “investment contract assets” from the definition of federal securities – effectively narrowing the SEC’s jurisdiction over digital assets.

No regulations have changed that would prevent another FTX from happening. And now the crypto industry is actually trying to reduce regulations.

“They want regulation inasmuch as they want their interpretation that crypto assets do not fall under the SEC and therefore are not regulated by the SEC,” White explained. “I don’t think most reasonable people would say that that’s regulation in any sort of normal sense.

“If you look at it, no regulations have changed that would prevent another FTX from happening,” White added. “And now the crypto industry is actually trying to reduce regulations.”

As for the strategic Bitcoin reserve, White said she doesn’t think the idea will get very far – especially Trump’s vision of it, which differs significantly from what most of the crypto community supports. There she’s referring to the policy espoused by Lummis and Trump’s pick for Secretary of Health and Human Services, Robert F Kennedy, Jr, who made his pitches shortly before Trump announced his idea at a Bitcoin conference in Nashville, Tennessee, in July. 

RFK Jr’s proposal would have led to the US buying as many as four million Bitcoins at the rate of 550 a day, while also pointing out that Trump previously called the digicoins a scam.

Trump, on the other hand, promised to use Bitcoin seized by the federal government as part of investigations into crimes involving stolen bitcoins, or those used for illegal purposes. 

“[Trump’s idea] doesn’t even make sense. He’s talking about it as like, these are Bitcoins that were stolen from you, and so we’re gonna keep them,” White observed. “Once court cases are over and the assets are firmly forfeited, they’re usually sold and then returned to victims.” 

That wouldn’t happen, presumably, under Trump’s plan. Though White acknowledged that return programs often end up with Bitcoin going unclaimed by people who wish to remain anonymous. 

No matter how you swing it, White told us, “I don’t have much faith that either [BTC reserve proposal] will come to pass.” 

But what about the environment?

Cryptocurrency mining using proof-of-work – the technique used by Bitcoin and many of its derivatives to verify transactions and create new coins – is incredibly energy and water intensive. Digiconomist’s Bitcoin Energy Consumption, run by data scientist Alex de Vries, estimates that a single Bitcoin transaction eats up the same amount of electricity as the average US household uses in almost a month. 

When asked how the crypto community plans to address all that energy consumption and electronic waste generated – which will only grow if Bitcoin becomes more popular – Porter had two recommendations.

First, the Satoshi Action Fund is pushing for the use of orphaned oil and gas wells – of which there are more than 120,000 across the country – to generate energy for Bitcoin mining. Many of those wells are leaky, and many also lack a custodian to keep seals working properly and prevent the emission of methane and other greenhouse gasses. If we were to put mining operations at those abandoned wells we could eliminate some of that spillage, argued Porter. 

“Ultimately, that’s really good for the environment in a number of different ways,” Porter told us. “You have the reduction of methane going into the atmosphere. Additionally methane can leak into the groundwater and cause contamination.

“The chance that the next EPA administrator could come in and actually do something about it would be, I think, a huge win for the environment,” Porter added. He’s confident that Satoshi Action will have a willing ear at the EPA – Porter’s cofounder, Mandy Gunasekara, spent several years at the EPA, part of it as chief of staff in the latter year of Trump’s first presidency. 

Second, Porter advocates for attaching Bitcoin mining operations to renewable energy facilities to avoid curtailing energy from sources like wind and solar during periods of underutilization. When asked why we shouldn’t prioritize energy storage modules like batteries for times of excess need, Porter told us batteries are expensive, and also need additional infrastructure to support the distribution of power. 

Much better to just slap a mining rig in there to eat up that excess juice, he argued.

“I guess that’s sort of an argument, that it’s better than literally nothing at all,” White explained when asked what she thought about burning leaking methane or using excess renewable energy on Bitcoin mining. “But it doesn’t actually change the fact that these gasses are being burned for this purpose.” 

White doesn’t believe the argument for deploying cryptocurrency mining infrastructure at renewable or abandoned wells is a compelling one – especially given crypto miners already have thin margins and tend to try to mine as cheaply as possible. 

That, and White believes Trump is unlikely to pay much attention to greening the Bitcoin mining process.

“Bitcoiners who are pro-Trump and also think that environmental causes will be followed under Trump just need to look at some of his appointments who are talking about basically reinvigorating the entire US oil industry,” White observed. “If any Bitcoin renewable projects do well in the next couple of years, I think it will be largely incidental.”

In the meantime, expect Bitcoin’s energy footprint to grow if, as Porter suggested, “Bitcoin is very undervalued” and could reach “upwards of $13 million per coin.” 

“Roughly 60 percent of the price value will ultimately end up as electricity costs, so for a $100k Bitcoin that means the electricity cost per coin could be $60k, which comes down to 1,200,000 kWh per BTC at 5 cents per kWh,” Digiconimist’s de Vries told us in an email. “I should however warn against simply multiplying this with a factor ten to get the impact for a $1m Bitcoin. Such a steep increase would certainly massively boost energy consumption.”

Bitcoin’s value rallied in the wake of Trump’s election, but it hasn’t managed to hit $100k yet. And it’s falling again, losing nearly $7,000 in value in the past five days. 

If Bitcoin wins, most of us stand to lose

Porter’s wishes for a Bitcoin-fueled future are, like much of the crypto industry’s projects, just that: wishes. Bitcoin strategic reserves are largely untested outside of countries like El Salvador, which has seen financial gains since Trump’s election on the price rally, but which saw its credit downgraded prior to BTC’s rally. Mining at abandoned wells is largely theoretical too, as is using curtailed renewable energy to mine.

In the meantime, all this Bitcoin advocacy is pushing the price – and the energy footprint – up. 

The only blessing in the 2022 cryptocurrency wipeout was that people without crypto investments were pretty much entirely insulated from the carnage.

White is also concerned that a pro-crypto regime could weaken the barricade between the crypto industry and the rest of the economy if the Trump administration legitimizes it with new policies. 

“The only blessing in the 2022 cryptocurrency wipeout was that people without crypto investments were pretty much entirely insulated from the carnage,” White wrote in her blog post shortly after the election. With Trump’s pick for Treasury Secretary a big proponent of Bitcoin, that legitimization could mean that future crypto volatility will begin to affect the broader US economy. That shakiness has already shown itself as the price of Bitcoin fell this week. 

“I fear we may soon wave goodbye to such a firewall as Trump’s crypto-enthusiastic administration and the new Congress allow crypto to enmesh itself within the broader financial and banking system,” White predicted. 

Whether any of this comes to pass, of course, is just as easy to predict as Bitcoin’s day-to-day price. Like many things with the Trump administration, mercuriality is the only real rule. ®