Should you forget Bitcoin and buy XRP (Ripple) instead?

The crypto market is heating up again. With the fourth Bitcoin (BTC 1.30%) With seven months of halving in the rearview mirror and a crypto-friendly result in the 2024 elections, leading coins appear to be poised for another rapid rise. As of November 22nd, Bitcoin is up 27% this month Ethereum (ETH -0.76%) recorded a richer increase of 36%.

But the biggest names aren’t always the best buys. The XRP (XRP 11.15%) The token is up 136% in November. Is XRP a better way to build wealth in the crypto market than Ethereum or Bitcoin?

Why Bitcoin and Ethereum Retain Higher Value Over Time

In general, Bitcoin and Ethereum should have more value than XRP in the long term.

• Bitcoin is intended to act as a general-purpose system for storing monetary value.
• Ethereum was designed to power automated financial systems and other software apps that form the foundation of decentralized finance (DeFi).
• XRP’s mission to provide fast, low-cost payments across international borders is still ambitious and legitimate – but it cannot be compared to the larger visions of smart contracts and full-fledged digital currencies.

Therefore, I don’t expect XRP to outperform Ethereum or Bitcoin forever. I suppose it could happen if another cryptocurrency (or entirely new financial technology) replaces Bitcoin as the leading “digital gold,” or if one of the so-called Ethereum killers offers an objectively superior smart contract platform. That would be bad news for the old crypto kings, but not necessarily good for XRP and its investors.

XRP’s evolving market position

That being said, XRP still has a lot of room to grow before it clashes with Ethereum and Bitcoin. In terms of total market value, this is now the sixth largest cryptocurrency, far behind the giants at the top. It would be particularly shocking if XRP had a larger market cap than Bitcoin – but its value could multiply more than twenty-fold without raising that question, and I would have to assume that Bitcoin has not risen in the same period:

Data collected by CoinMarketCap on November 22, 2024.

Bitcoin is intended to replace physical gold as a system for storing financial value. That equates to a market worth around $14 trillion today.

The global volume of cross-border payments is much larger, estimated at around $190 trillion per year. But the fees, exchange rate costs and service costs associated with these massive flows of money are far less, at $193 billion in 2023.

Therefore, XRP aims for a smaller revenue opportunity. And remember that the RippleNet payment service is known for moving money with minimal fees. The actual sales target of the token will therefore be far below the current banking system’s share of foreign transfers.

XRP deserves your consideration alongside larger coins

Now you know how the long-term value of XRP compares to that of Bitcoin and Ethereum, I have addressed the limits of the target market for this token. Bitcoin can clearly fill a role in your portfolio that XRP doesn’t even attempt to fulfill, and the same goes for Ethereum. A well-rounded cryptocurrency portfolio should have some exposure to the two biggest names in the sector.

I’m not saying you should sell your Bitcoins today and bet on XRP. Nevertheless, the XRP token appears to be undervalued and offers plenty of room for growth in the next few years. The legal challenge filed by the U.S. Securities and Exchange Commission four years ago is expected to be completed in 2025.

Around the world, money center banks are taking blockchain-based payment systems more seriously than ever, with XRP playing a leading role in this adoption trend. And the RippleNet service is busy – the number of daily XRP payments has tripled in six months.

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

So, in addition to the generally bullish sentiment in the crypto sector, XRP has several growth catalysts at play. Don’t forget Bitcoin and think about Ethereum too, but you should also make room for another successful name. A small ball of XRP tokens should serve your nest egg well in this bull market.