Better Cryptocurrency to Buy Now: Bitcoin vs. XRP

Bitcoin (CRYPTO: BTC) And XRP (CRYPTO: XRP) are two very different types of cryptocurrencies. Bitcoin, the world's top cryptocurrency, is often considered

Bitcoin (CRYPTO: BTC) and XRP (CRYPTO: XRP) are two of the most well-known cryptocurrencies in the world. But despite their popularity, they are very different types of digital assets. Bitcoin is the world’s top cryptocurrency by market cap, and it is often considered a “blue chip” coin due to its relative stability compared to smaller altcoins. XRP, on the other hand, is the native cryptocurrency of the Ripple payment platform, and it is a much smaller token that has traded largely on the drama surrounding a U.S. Securities and Exchange Commission (SEC) lawsuit over the past four years.

So which cryptocurrency is a better buy today? Let’s take a closer look at both digital assets and see how they stack up.

Bitcoin vs. XRP performance

Over the past 12 months, Bitcoin’s price has increased by 134%, while XRP’s price has increased by 14%. Over the past five years, Bitcoin’s price has increased by 487%, while XRP’s price has increased by 116%. As you can see, Bitcoin has significantly outperformed XRP over both the short and long term.

The key differences

Bitcoin is often compared to physical metals like gold, as it is digitally mined through an energy-intensive proof-of-work (PoW) process. In this process, miners use powerful ASIC chips to process computations and earn Bitcoin rewards via the blockchain. That process gets more challenging every four years with scheduled “halvings,” which cut the rewards for mining Bitcoin in half. As of this writing, nearly 19.8 million Bitcoins (out of a maximum lifetime supply of 21 million) have been mined. But because of the increasing difficulty of mining Bitcoin, experts don’t expect the last Bitcoin to be mined before 2140. It’s a tightly controlled long-term inflationary policy.

Bitcoin’s blockchain does not support smart contracts or decentralized apps (dApps) like the proof-of-stake (PoS) blockchains used by Ethereum, SunnyAnd Cardano, However, its simple approach to mining, scarcity, and increasing acceptance for mainstream payments make it more comparable to gold, silver, and other precious metals than many other cryptocurrencies.

XRP is a token that was digitally coined instead of mined. Its parent company, Ripple, minted its entire supply of 100 billion tokens ahead of its market debut, and it initially locked up 55 billion of those tokens in escrow accounts on its blockchain. It periodically releases some of those tokens to stabilize its liquidity and supply. It does not create new tokens, only distributes a fixed supply.

Ripple is promoting its payment processing blockchain and closely related RippleNet service as an alternative to the international payments protocol SWIFT (Society for Worldwide Interbank Financial Telecommunication) used by most banks. The company says its blockchain can process real-time gross payments, remittances and currency exchange transactions faster and at much lower costs.

Ripple promoted XRP as its own cryptocurrency, but many financial institutions simply used its blockchain to make traditional fiat currency payments. Ripple launched an initial coin offering (ICO) for XRP in 2013 to gain some traction, but the SEC sued Ripple over the offering in 2020, accusing it of selling unregistered securities.

The short-term outlook

Bitcoin has benefited from two tailwinds this year. First, in January, the SEC approved the first 11 spot-price Bitcoin exchange-traded funds (ETFs). These ETFs allow investors to gain direct exposure to Bitcoin through their brokerage accounts without trading on a cryptocurrency exchange. Second, Bitcoin’s most recent halving in April made it even harder to mine new coins.

Both of these factors could help propel Bitcoin to new highs in 2024, especially if the Federal Reserve pivots to cutting interest rates later this year. But XRP also had some good news recently. XRP’s price surged earlier this month after Ripple finally settled its SEC lawsuit. Ripple was only fined $125 million, down from the SEC’s original demand of $2 billion. A federal district court ruled that its ICO did not constitute a sale of unregistered securities. That settlement eliminates the biggest near-term headwind for XRP.

Ripple plans to launch its own stablecoin (Ripple USD) and $10 million worth of tokenized US T-bills on the XRP blockchain this year. It’s also gearing up to upgrade that ledger with new tools for developing decentralized finance (DeFi) apps and dynamic non-fungible tokens (NFTs), and those new projects could help stabilize and boost XRP’s market price. Expectations of interest rate cuts in the near future are driving some investors back into the crypto market. If interest rates fall in the coming quarters, both Bitcoin and XRP could both stabilize and climb higher.

Better cryptocurrency to buy now

With a market cap of $1.2 trillion, Bitcoin is worth more than half of the total crypto

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