Should You Forget Bitcoin and Buy XRP (Ripple) Instead? – The Motley Fool

The virtual currency market is heating up again. in the fourth Bitcoin (BTC -1.18%) With seven months in the rearview mirror and a favorable outcome for cryptocurrencies in the 2024 election, major coins look poised to soar again. As of November 22nd, Bitcoin is up 27% this month. Ethereum (Ethereum -2.64%) It posted a massive 36% profit.

But big companies don't always make the best buys. of XRP (XRP -7.39%) The token soared 136% in November. Is XRP a better way to build wealth in the crypto market than Ethereum or Bitcoin?

Why Bitcoin and Ethereum maintain their value over time

In general, Bitcoin and Ethereum should be worth more than XRP in the long run.

• Bitcoin aims to serve as a general-purpose system for storing monetary value.
• Ethereum was built to power automated financial systems and other software apps that are the foundation of decentralized finance (DeFi).
• XRP's mission to provide fast, low-cost payments across borders remains ambitious and legitimate, but it pales in comparison to the larger vision of smart contracts and full-fledged digital currencies.

Therefore, I do not expect XRP to surpass Ethereum or Bitcoin forever. If another cryptocurrency (or an entirely new financial technology) replaces Bitcoin as the primary “digital gold,” or if one of the so-called Ethereum killers provides an objectively superior smart contract platform, I think it could happen. While this is bad news for the old crypto tycoons, it's not necessarily good for XRP and its investors.

Evolving XRP market position

That being said, XRP has a lot of room to grow before colliding with Ethereum and Bitcoin. It is currently the sixth largest cryptocurrency by market capitalization, well behind the top giants. It would be especially shocking to see XRP have a larger market capitalization than Bitcoin, but it's possible that XRP's value could increase more than 20 times without such questions and Bitcoin We would have to assume that has not increased over the same period:

Data collected from CoinMarketCap on November 22, 2024.

Bitcoin aims to replace physical gold as a system for storing monetary value. This equates to a market of approximately $14 trillion today.

Global cross-border payments are much larger, estimated at around $190 trillion annually. However, the fees, exchange costs, and service costs associated with these huge capital flows will be much lower at $193 billion in 2023.

Therefore, XRP is aimed at smaller revenue generation opportunities. Also, keep in mind that the company's RippleNet payment service is known for moving money with minimal fees. Therefore, the actual revenue target for the token will be far less than the current banking system's share of international remittances.

XRP deserves consideration alongside bigger coins

Now you can see how XRP's long-term value compares to Bitcoin and Ethereum. We also touched on the limitations of the target market for this token. Bitcoin can clearly fill a portfolio role that XRP does not even attempt to address, and the same can be said for Ethereum. A balanced crypto portfolio should include some exposure to the two largest companies in the sector.

I'm not saying you should sell Bitcoin and go all in on XRP today. Still, the XRP token appears to be undervalued and has plenty of room to grow in the coming years. A legal challenge filed by the U.S. Securities and Exchange Commission four years ago should conclude in 2025.

Money center banks around the world are taking blockchain-based payment systems more seriously than ever before, and XRP is playing a leading role in that adoption trend. And the RippleNet service is crowded, with the number of daily XRP payments tripling in six months.

I could go on and on about the positive trends in the Ripple space, from liquidity pools to central bank digital currencies, but you get my point. This fairly large cryptocurrency could go anywhere.

So, in addition to the overall bullish mood in the crypto sector, there are several growth catalysts in play for XRP. Don't forget Bitcoin and keep Ethereum in mind as well. But we also have to leave room for another winner. A small amount of XRP tokens should serve you well in this bull market.