Cryptocurrencies, Bitcoin & XRP

Understanding the Opportunities and Risks in a Volatile Market

Year-to-Date Price Change: Bitcoin, XRP, and SP500 (SPY)

Cryptocurrency and Blockchain

Cryptocurrency is a digital asset that operates on decentralized networks called blockchains, which enable secure, transparent, and tamper-resistant transactions without the need for a central authority like a bank. Bitcoin (BTC), the first and most well-known cryptocurrency, was created as a decentralized alternative to traditional money, offering a fixed supply and a system of validation through Proof-of-Work (PoW) mining. Bitcoin’s blockchain is highly secure but relatively slow and costly for transactions, leading to the development of other cryptocurrencies with different use cases. One such asset is XRP, which was designed specifically for fast and cost-efficient cross-border payments. Unlike Bitcoin, which functions as a store of value, XRP serves as a bridge currency for financial institutions, allowing them to move money globally in a matter of seconds. While XRP presents unique advantages over traditional payment networks, it also comes with distinct risks and considerations, which we’ll explore further.

What is XRP?

XRP is a digital asset designed primarily for fast and cost-efficient cross-border transactions. It operates on the XRP Ledger (XRPL), a blockchain-based system created by Ripple Labs. Unlike Bitcoin, which functions as a decentralized store of value, XRP’s primary use case is as a bridge currency to facilitate payments between financial institutions. Transactions settle in seconds, and fees are significantly lower than traditional banking systems or even other cryptocurrencies. Because of these advantages, Ripple has formed partnerships with major banks and payment providers.

Opportunities & Risks

The potential upside of XRP lies in its adoption by financial institutions and its utility in global payments. If Ripple continues to expand its partnerships, XRP could play a meaningful role in international finance. However, there are key risks to consider:

Regulatory Uncertainty: XRP has been at the center of legal battles with the SEC, and while Ripple has won favorable rulings recently, ongoing regulatory changes could impact its use.
Market Volatility: Like all cryptocurrencies, XRP is highly volatile and subject to speculation.
Competition: XRP competes with SWIFT, stablecoins, and emerging Central Bank Digital Currencies (CBDCs), which could limit its long-term adoption.

Recent Price Trends & Causes

Over the past year, XRP has shown strong price movements, particularly following key legal victories for Ripple against the SEC. However, recent broader crypto market weakness—driven by regulatory concerns, ETF outflows, and macroeconomic uncertainty—has led to some pullback in price. While short-term fluctuations are common, long-term performance will largely depend on further institutional adoption and regulatory clarity.

XRP has experienced a notable decline of over 40% since mid-January 2025. Several factors have contributed to this downturn:

Government Policy Announcements: President Donald Trump's executive order to create a digital asset stockpile, which included XRP, did not meet market expectations. The plan specified that acquisitions would occur only through forfeiture proceedings, with no new purchases, leading to a selloff among traders anticipating broader support.
Escrow Releases and Whale Sell-Offs: On February 3, 2025, a scheduled release of 1 billion XRP from escrow increased the circulating supply. This release, coupled with significant sell-offs by large holders ("whales"), exerted downward pressure on XRP's price, contributing to a 24.6% drop.
Declining Network Activity: In January and February there was a substantial decrease in XRP's network activity, with active addresses dropping by 50% since December. This decline indicates reduced user engagement and transaction volume, negatively impacting market sentiment and price. Thus far in March, network activity has recovered which has likely contributed to the partial XRP price rebound.
Broader Cryptocurrency Market Weakness: The overall cryptocurrency market has faced a downturn, influenced by macroeconomic uncertainties, including new U.S. trade tariffs and shifting investor sentiment. This broader market weakness has affected XRP alongside other digital assets.
Regulatory Uncertainty: Ongoing legal challenges, particularly the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple Labs, have created uncertainty. Speculation about the case's outcome has contributed to increased volatility and downward pressure on XRP's price.

XRP vs. Bitcoin

Bitcoin (BTC) and XRP serve distinct purposes in the cryptocurrency space. Bitcoin is primarily a decentralized store of value, often referred to as "digital gold", due to its fixed supply of 21 million coins and its strong adoption as an investment asset. It operates on a Proof-of-Work (PoW) system, making it highly secure and fully decentralized, though slower and more expensive for transactions. XRP, on the other hand, is designed for fast and cost-efficient cross-border payments, settling transactions in seconds with minimal fees. It acts as a bridge currency for banks and financial institutions, aiming to replace or complement traditional systems like SWIFT. However, while Bitcoin enjoys widespread regulatory acceptance, XRP has faced legal scrutiny from the SEC, creating uncertainty around its long-term adoption.

From an investment perspective, Bitcoin is the safer and more established asset, with growing institutional support, Bitcoin ETFs, and its role as a hedge against inflation. XRP offers higher risk but also greater potential upside, particularly if Ripple continues expanding its partnerships with financial institutions.

Portfolio Considerations

While cryptocurrency may have a place in a diversified portfolio, we recommend it be kept at a moderate allocation—typically 5% or less of your overall investments. Crypto is highly speculative, and while it has the potential for high returns, it should be balanced with more stable asset classes such as equities, bonds, and real estate. Within that crypto allocation, diversification across multiple assets (e.g., Bitcoin, Ethereum, and XRP) may help manage risk.

Disclosure

Investment advisory services are offered through, Jackson Creek Investment Advisors LLC, a Registered Investment Adviser. The views expressed represent the opinion of Jackson Creek Investment Advisors LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Jackson Creek Investment Advisors LLC believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the Jackson Creek Investment Advisors LLC ‘s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in equity securities involves risks, including the potential loss of principal. While equities may offer the potential for greater long-term growth than most debt securities, they generally have higher volatility. International investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.