Which is the Smarter Investment: XRP or Bitcoin?

The crypto market is buzzing again after a quiet March, with activity and volatility on the rise.

For instance, Bitcoin (BTC 1.07%) has surged 3% in just five hours as I write this on the morning of March 31. Despite this recent spike, the leading cryptocurrency has decreased by 5% in the past week and 7% over the last month.

Similarly, XRP (XRP -0.58%) has increased by 4.4% in 5 hours, though it has still seen a decline of 17% in a week and 39% in a month.

Crypto investors are experiencing a whirlwind of emotions lately. One moment, it seems like the government might propel the cryptocurrency sector forward, and the next, investors are retreating amid concerns about new tariffs and inflation. In such a shaky economy, many are reluctant to hold highly speculative cryptocurrencies.

I’ll circle back to these sentiments in a moment. For now, you should know that I generally support crypto investments. I believe that the best cryptocurrencies and transactional systems are likely to appreciate in value over time. If you hold a different perspective, you might prefer to read about solid dividend stocks or gold-based investments for the long term. That’s completely fine. I’ll still be here whenever you change your mind.

With that said, I aim to determine whether XRP or Bitcoin represents the superior investment option in April 2025. Has a slight dip in the price of “digital gold” created a unique buying opportunity? Will XRP rebound from its considerable downturn with vigor?

Let’s find out.

What sets Bitcoin apart?

“Bitcoin maximalists” assert that Bitcoin is the only cryptocurrency worth considering. It was designed to hold (and appreciate) monetary value over time, and no other digital asset can supplant it. If you’re engaging in this sector, it’s advisable to acquire genuine Bitcoin, potentially complemented by exchange-traded funds (ETFs) tied to spot Bitcoin prices, like the popular iShares Bitcoin Trust ETF (IBIT 3.01%). Some investors may also explore stocks in companies that own, buy, and even create Bitcoin.

However, this interpretation might overextend the “maximalist” narrative. For example, Strategy (MSTR 6.14%) chairman Michael Saylor might acknowledge that his company is a worthwhile investment, as Strategy, previously MicroStrategy, is actively acquiring more Bitcoin. Nonetheless, he believes that holding Bitcoin itself is the most effective means of preserving cash.

With this in mind, every dip in Bitcoin’s price could be seen as a buying opportunity. If Bitcoin is destined to rise from below $100,000 to several million dollars per coin over time, it may be prudent to dollar-cost average this cryptocurrency, consistently investing a fixed amount each month, regardless of market fluctuations.

The unique value proposition of XRP

XRP tells a different story.

The digital asset central to the Ripple payment system emphasizes rapid, easy, and cost-effective transactions. It was designed to enable cross-border payments, reducing the limitations and costs associated with traditional banking methods.

Recently, Ripple CEO Brad Garlinghouse highlighted that XRP-enabled transactions could potentially replace the outdated Society for Worldwide Interbank Financial Telecommunication (SWIFT) system, which incurs high processing fees and often takes several days to finalize a simple money transfer.

“The market opportunity here is massive,” Garlinghouse said in a recent Fox Business interview. “Trillions of dollars are flowing cross-border globally, and SWIFT still dominates that space.”

Of course, Ripple isn’t the sole alternative to the increasingly obsolete SWIFT system. Intricate international payments require navigating various local currencies and regulations. Ideally, you could send a $10 payment and watch 100 Swedish crowns instantaneously appear in the recipient’s Scandinavian bank account. The RippleNet service comes close to this ideal, as do other platforms like PayPal‘s (PYPL 1.40%) HyperWallet, Payoneer (PAYO 2.12%), or the Wise (WIZE.Y 1.28%) platform.

Thus, individuals and businesses sending money overseas have several options. Ripple distinguishes itself by leveraging a vast network of local banking partnerships and incredibly fast transaction processing.

As Garlinghouse noted, Ripple is tackling a significant market with tangible business prospects. Capturing even a small fraction of this market could generate significant value for coinholders, and this cost-efficient model could drive growth in the cross-border payment space.

XRP does not focus on serving as a store of value; it emphasizes reasonably priced yet fee-generating transactions. The RippleNet service is already operational and positioned for substantial growth, especially if it can attract more users within the evolving regulatory landscape for crypto in the U.S.

Distinct strengths appeal to different investors (but Bitcoin remains hard to beat)

XRP and Bitcoin are both cryptocurrencies, but they differ vastly in nature.

• Investing in Bitcoin resembles purchasing a digital equivalent of gold bars—storing your cash in a secure, potentially appreciating asset for the long term. Although the digital currency has seen slight declines in recent weeks, those with patience could accumulate considerable wealth through Bitcoin over the years.
• Conversely, acquiring XRP feels more like investing in the RippleNet international payment service. This coin gains value as its usage increases, akin to an active growth stock rather than a mere lump of gold. It’s challenging to assign a fair value to this growth narrative, particularly since Ripple has yet to release quarterly financial reports, but XRP investors have faced stagnant or even negative returns over the past five years. The surge in November allowed XRP’s market value to align more closely with its promising long-term business prospects.

These cryptocurrencies cater to different types of investors, although nothing prevents you from holding both. However, it’s advisable to establish a solid Bitcoin foundation before adding the allure of XRP’s growth narrative to your crypto portfolio. Diversification is just as crucial in the crypto market as it is on traditional Wall Street.