Gemini warned that XRP is not Bitcoin.
After more than eight years at the helm of the US central bank, Jerome Powell’s term ended on Friday, and he was replaced by the 17th Federal Reserve Chairman, Kevin Warsh.
Given US President Trump’s increasing public issues with Powell for his refusal to cut key interest rates, the new US president is expected to have a more open approach to the institution’s monetary policy. He has also expressed support for Bitcoin in the past, which has led some altcoin fans to wonder if it extends to other crypto assets.
As such, we decided to ask one of the most popular AI models whether XRP, the third largest non-stable altcoin, could also benefit.
Much more accurate
Bitcoin benefits from being seen as “digital gold,” but the landscape surrounding utility-focused alternatives like XRP under the Warsh-led Fed is “much more nuanced,” Gemini said. She added that the new Fed chair is likely to bring “a combination of strict macroeconomic discipline and an open approach to financial innovation that could uniquely impact the Ripple ecosystem.”
Its pre-office disclosures revealed investments across the DeFi space, layer-one blockchains, and digital asset exchanges, demonstrating a desire to use cryptocurrencies beyond mere store-of-value propositions.
More importantly for XRP, Warsh has been vocal about “modernizing money.” He has argued in the past that central banks should “proactively engage with digital currencies, and has pushed the US to consider a central bank digital currency to remain competitive, especially against initiatives like China’s digital yuan.”
Ripple has positioned the XRP Ledger to serve as a neutral bridge asset to various central bank digital currencies, which could benefit the underlying asset.
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“A Federal Reserve Chairman actively exploring the integration of blockchain-based digital money into the traditional financial system provides a huge structural tailwind to Ripple’s core business model,” Gemini concluded in its bullish case.
But there is more
However, not all forecasts are promising and optimistic. Warsh has repeatedly pointed out that the explosion in alternative digital assets is largely a byproduct of loose monetary policy, AI warned. XRP, like most altcoins, relies heavily on broad market liquidity.
Gemini believes capital is likely to become more expensive in the US as Warsh may want to reduce the Fed’s influence on financial markets. Gemini added that in such liquidity-constrained environments, investors typically “flee from altcoins towards safer assets or Bitcoin.”
If the new Fed chair implements his vision of higher real interest rates and a smaller Fed balance sheet, XRP could face “severe downward price pressure as speculative capital dries up.”
