Which is the Better Investment: XRP or Bitcoin?

The cryptocurrency market is buzzing again after a slowdown in March, with activity and volatility surging.

For instance, Bitcoin (BTC 1.09%) has experienced a 3% rise within just five hours as I write this on the morning of March 31. However, this leading cryptocurrency has also seen a 5% decline over the past week and 7% over the last month.

Similarly, the soaring XRP (XRP -1.25%) has made a gain of 4.4% in the last five hours, yet it has dropped 17% in a week and 39% in a month.

Emotions within the crypto community are quite mixed these days. One moment, it appears as though the Trump administration might send the entire crypto sector skyrocketing, only for panic to ensue moments later due to fresh tariffs and inflation concerns. In a shaky economy, holding speculative cryptocurrencies becomes a daunting prospect for many.

I’ll revisit these sentiments shortly. First, I want to clarify that I am generally a buyer of cryptocurrency. I believe that the most promising forms of these innovative currency and transaction systems will appreciate in value over the long term. If you don’t align with this viewpoint, you might find more joy exploring the best dividend stocks and gold-backed investments instead. That’s perfectly fine; I’ll be right here if you reconsider.

With that said, let’s analyze whether XRP or Bitcoin is the better investment in April 2025. Is there a unique buying opportunity arising from a slight dip in “digital gold”? Can XRP rebound from its recent decline with considerable momentum?

Let’s find out.

What Sets Bitcoin Apart?

Those who identify as “Bitcoin maximalists” argue that Bitcoin is the only cryptocurrency that truly matters. Designed to retain (and increase) its monetary value over time, they believe no other digital asset can replace it. If you are venturing into this sector, amassing actual Bitcoin holdings is often advised, potentially supplemented by exchange-traded funds (ETFs) that track spot Bitcoin prices, such as the well-regarded iShares Bitcoin Trust ETF (IBIT 3.01%). Some investors may even consider buying stock in companies engaged in acquiring and creating Bitcoin.

However, that might stretch the “maximalist” concept a bit far. Michael Saylor, chairman of Strategy (MSTR 6.14%), might agree that his own firm represents a solid investment, as it is actively working to gather more Bitcoin. Yet, Saylor holds that directly owning Bitcoin is the best way to safeguard cash.

From this perspective, every downturn in Bitcoin’s price appears to be a buying opportunity. If Bitcoin is forecasted to ascend from below $100,000 to potentially millions per coin in the future, implementing a dollar-cost averaging strategy—investing a fixed amount regularly, regardless of price fluctuations—may be prudent.

The Unique Value Proposition of XRP

XRP tells a different story.

This digital currency, central to the Ripple payment ecosystem, emphasizes fast, affordable transactions. It was designed to streamline cross-border payments, reducing the barriers and costs associated with the cumbersome methods used by traditional banks.

Recently, Ripple CEO Brad Garlinghouse made it clear that XRP transactions could potentially replace the outdated Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which imposes hefty fees and may take several days to complete a simple transfer.

“The market opportunity here is massive,” Garlinghouse stated in a Fox Business interview. “Trillions of dollars flow across borders globally, and SWIFT still dominates that space.”

Of course, Ripple isn’t the only modern solution to the aging SWIFT system. Facilitating international payments may sound straightforward, but it involves navigating various local currencies and regulatory environments. Ideally, you’d make a $10 payment and see 100 Swedish crowns deposit into the payee’s account instantly. While RippleNet approaches this ideal, alternatives like PayPal‘s (PYPL 1.40%) HyperWallet, Payoneer (PAYO 2.12%), and Wise (WIZE.Y 1.28%) have similar offerings.

This means that individuals and businesses sending money internationally have multiple choices. Ripple distinguishes itself in this crowded market with its extensive network of local banking partners and swift processing times.

As Garlinghouse pointed out, Ripple is targeting a substantial market with tangible business opportunities. Even capturing a small segment could substantially benefit coinholders, and this cost-effective solution could drive growth in international payments as well.

XRP does not focus on storing value; instead, it centers on affordable yet profitable transactions. The RippleNet service is already operational and is positioned for expansive growth, especially as it adapts to the evolving regulatory landscape for cryptocurrencies in the U.S.

Diverse Strengths for Different Investors (though Bitcoin is hard to top)

While XRP and Bitcoin are both cryptocurrencies, their characteristics diverge significantly.

• Investing in Bitcoin resembles accumulating a digital version of gold, where your funds are secured in a potentially appreciating asset over the long term. Although Bitcoin has seen slight declines recently, patient investors could accrue substantial wealth over time.
• Conversely, purchasing XRP is akin to investing in the RippleNet international payment solution. This coin gains value as its adoption grows, resembling an active growth stock rather than a static asset. Assigning a fair value to this growth story can be challenging, especially since Ripple has not yet released quarterly financial statements; however, XRP investors have faced stagnant or decreasing returns in the past five years. The surge in November seemed to align XRP’s market value more closely with its promising long-term business potential.

Both cryptocurrencies serve different types of investors, but nothing prevents you from owning both. That said, establishing a solid Bitcoin foundation before adding XRP’s enticing growth narrative to your cryptocurrency portfolio may be the wiser approach. Diversification is as crucial in the crypto market as it is within traditional finance.