Summary
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Fidelity Digital Assets analysis suggests multiple on-chain metrics, like the MVRV Z-Score and NUPL ratio, indicate Ethereum (ETH) might be undervalued and reaching a price bottom or “capitulation” point.
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Despite ETH’s significant price decline in Q1 and bearish technical signals, user activity on Ethereum’s Layer 2 networks surged to a record 13.6 million active addresses, demonstrating strong ecosystem growth and adoption.
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Conflicting signals require consideration: while some metrics suggest undervaluation and network use is high, ETH’s market cap ratio to Bitcoin remains low (mid-2020 levels), and past instances show prices can fall further even after similar signals appear.
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Analysis of ETH’s realized price ($2,020, ~10% above current value) compared to its spot price drop suggests short-term holders likely drove recent selling, while long-term holders have largely maintained their positions, potentially stabilizing the price base.
A provocative prediction circulating online, amplified by the X account “All Things XRP,” posits a connection between potential tax policy changes under former President Donald Trump and a dramatic surge in the cryptocurrency market, particularly for XRP.
This theory has ignited discussion regarding the possible ripple effects of fiscal policy on digital asset investments.
Proposed Tax Plan: A Catalyst for Disposable Income?
The central hypothesis revolves around the proposed elimination of federal income tax for Americans earning less than $200,000 annually.
Proponents of this theory highlight that such a measure would impact approximately 90% of the U.S. workforce, potentially injecting significant disposable income into the economy.
Could Crypto Capture New Capital?
The crucial question of how to allocate these additional funds arises.
The analysis suggests that a considerable portion could flow into the cryptocurrency sector, especially among individuals predisposed to saving and investing.
While current data indicates that only about 28% of Americans own cryptocurrency, the theory speculates that an influx of disposable income could dramatically accelerate adoption rates.
XRP Positioned as Potential Leader?
Within this potential crypto investment wave, the argument favors XRP as a standout beneficiary over established giants like Bitcoin and Ethereum.
The rationale points to XRP’s advantages in transaction efficiency—namely, its lower costs and faster speeds—which could make it more appealing to new investors compared to Bitcoin’s slower processing or Ethereum’s potentially high transaction (gas) fees.
Favorable Conditions and Evolving Role for XRP
Supporting this outlook, the analysis notes positive developments for XRP within the U.S. financial context, including Ripple’s partial legal success against the SEC and the anticipation surrounding a potential XRP Spot ETF approval.
These factors are seen as potentially strengthening XRP’s legitimacy and accessibility.
Furthermore, the theory looks beyond XRP’s current primary function in facilitating payments and transfers.
It envisions a possible future where XRP could also gain recognition as a store of value, placing it in a category similar to Bitcoin, often termed “digital gold.”
Speculation Mounts: A 1000% XRP Surge?
The most dramatic claim stemming from this analysis is the forecast of an XRP price rally exceeding 1000%.
It is critically emphasized that this projection is purely hypothetical and entirely dependent on the proposed tax cuts becoming a reality and triggering the predicted chain reaction of increased crypto investment.
Recent Market Trends Offer Context
To provide context, the article references XRP’s recent performance, citing a significant increase over the past year alongside more modest recent gains (specific percentages were mentioned in the source but omitted here to avoid dependence on time-sensitive data unless crucial).
Ultimately, the entire forecast remains anchored in the speculative scenario of specific tax policy changes and their subsequent, unproven market consequences.
Also Read: The Effects of Trump’s First 100 Days on Crypto
*Disclaimer*: We at Bitcoinleef.com present you with the latest information in the crypto market. However, this information should not be regarded as financial advice and viewers should consult their financial advisors before investing.
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