XRP rises 300% in a month and will Bitcoin really become ‘too big to fail’ in 2025?

XRP broke through the $2 level this weekend and has been the undisputed winner in recent weeks ever since the announced departure of Gary Gensler, the head of the SEC who filed a lawsuit against Ripple Labs. In the past month alone, XRP won well over 300%.

Although the growth of Bitcoin and the overall crypto market is undeniable at the moment and the next year also looks really bright, as always it is good to spread your risk and think about what might go wrong. Therefore let’s ask this question: isn’t the current growth curve a bit too steep? Doesn’t Bitcoin, with all its new investors, simply become indispensable in the current financial system, or ‘too big to fail’ as they say? And what happens to that economy if Bitcoin suddenly drops from, let’s say, a price of $100,000 to $20,000?

Bitcoin bashing

For all those not actively involved in the global economy in 2007-2009 or those not yet stuck in an office at the time, the term ‘too big to fail’ refers to the major banks of the period which were taken over by various Western governments (including Spain, Germany, Ireland, Greece and the United States) because the financial system threatened to come to a standstill if those banks were allowed to collapse.

Most commentators in the Western business press (aka the Wall Street Journal, the Financial Times, Bloomberg and The Economist to name just a few) were ‘Bitcoin bashing’ in recent years to boost their own advertising revenue (the classic financial world were their customers, hence being negative on crypto was quite normal for them). That will change sharply in 2024 as about half of all political races for the United States congress were paid for by the crypto lobby.

Ever since the election victory of Donald Trump, who, after once labeling the same industry as a “scam”, set himself up as the “crypto president” and promised to make New York the “crypto capital of the planet”, cryptocurrency prices have risen sharply. This is mainly due to the expectation that a second Trump administration will introduce rules that allow everyone to safely invest in digital currencies.

Altcoins

It also became clear this year, with the introduction of the Bitcoin ETFs, what this could mean for altcoins. Suppose XRP found as many investors as BlackRock already found this year for their Bitcoin ETF, then a doubling of the XRP price would be a logical outcome.

Bitcoin has risen by about 40 percent since Trump’s election victory, reaching a new all-time high of just under $100,000. The estimated market value of all cryptocurrencies has increased by more than $1 trillion ever since then.

But that growth also entails risk. Because if digital coins now also appeal to older generations, I dare not think about how they will react if we take a step back after that fabulous growth. And as anyone who has been following Bitcoin for a while knows, those steps back can sometimes be very painful and cut quite deep. 2025 will be a very interesting.