Better buy in 2025: XRP or Bitcoin?

Cryptocurrency investors are having a great year in 2024. The total value of all currencies and tokens in the industry currently stands at $3.5 trillion, more than doubling from where it ended in 2023.

Industry leading cryptocurrencies such as Bitcoin (Bitcoin 4.17%) It is responsible for most of this added value, but several tokens at the more speculative end of the market also posted strong gains. until XRP (XRP 2.43%)which was under a dark regulatory cloud until recently, will rise by 250% in 2024.

Lower interest rates increase demand for growth assets such as stocks and cryptocurrencies. Investors are also hoping that the incoming Trump administration will be more friendly to cryptocurrencies than previous administrations. This could pave the way for new opportunities for the industry to create value.

XRP could be one of the biggest beneficiaries of this regulatory shift, but will it be better to buy than Bitcoin in 2025?

Image source: Getty Images.

XRP (Ripple) Status

Global banking is complex. Sending money around the world can take days. Some financial institutions use the SWIFT payment network, while others do not, which means they need an intermediary to act as an intermediary for each transaction.

Company called ripple He sought to fix this problem. The Ripple Payments Network (formerly known as RippleNet) connects to all existing banking infrastructure, so financial institutions can talk to each other directly and settle transactions instantly.

Ripple also created the XRP crypto token to standardize those transactions. For example, a US bank might send XRP to a Japanese bank instead of US dollars, which would eliminate currency exchange fees and other transaction costs. The two banks can then handle their own conversions from XRP to the fiat currency of their choice.

There are 100 billion XRP tokens in existence. 57 billion are in circulation, and Ripple holds the other 43 billion, issuing up to 1 billion per month to meet institutional demand. In 2020, the United States Securities and Exchange Commission The SEC has filed a lawsuit against Ripple because the regulator believes that the XRP token should be classified as a financial security (like a stock or bond), which would place strict restrictions on how it can be issued and how the company operates.

The lawsuit was partially resolved in August 2024. Ripple was fined $125 million. The judge decided that XRP was only a security in certain situations, such as when new tokens are sold to institutions, but not when they are traded on cryptocurrency exchanges or used in transactions.

The SEC is appealing the decision, but President-elect Donald Trump recently nominated pro-crypto businessman Paul Atkins to run the regulatory body during his administration (pending Senate confirmation). Therefore, investors hope that the legal problems facing Ripple will disappear after January 20, once the new government takes office.

For this reason, the bulk of XRP’s year-to-date gains occurred after the election on November 5. But the token is trading at $2.21 as of this writing, which is still well below its record high of $3.40 in 2018. It could move higher. Next year, however XRP is still a speculative asset, so investors should be careful.

The case for Bitcoin

Unlike XRP, Bitcoin It is not sponsored by any individual or company that can issue further offers. There are 19.8 million bitcoins in circulation right now, but there will only be a maximum of 21 million. It is expected to be in total supply Completely mined By 2140.

As a result, Bitcoin never faced the regulatory problems that Ripple did. In fact, the Securities and Exchange Commission (SEC) has approved dozens of Bitcoin exchange-traded funds (ETFs) this year, which gives financial advisors and institutional investors a safer, more regulated way to own them. The Bitcoin ETF industry already manages over $110 billion in assets, so demand is incredibly strong.

Bitcoin has consistently risen to new highs even after experiencing severe corrections over the years, which is not the case for most people. Cryptocurrencies. Combined with the limited supply and decentralized nature, this is a major reason why investors are warming to it as a true store of value.

Some analysts refer to Bitcoin as a digital version of gold. The total value of all above-ground gold reserves is currently $17.7 trillion, i.e. Bitcoin Market value It must grow ($1.9 trillion as of this writing) by 831% to catch up. This means a price of about $893,000 per bitcoin.

Then there’s Michael Saylor, co-founder of Accurate strategywhich owns more than 439,000 Bitcoins (i.e. more than 2% of the total supply). He expects Bitcoin to rise to $13 million per coin by 2045, because he believes the United States can create a framework for digital assets that would open the door to new use cases and pave the way for widespread adoption.

Since that means Bitcoin’s market cap is $257 trillion, roughly nine times the size of the entire US economy in 2023, $13 million per coin is… probably A bit optimistic, even taking into account dollar inflation in the next two decades.

Judgment

The Ripple Payments network is very innovative, but there is a catch: banks are not required to use XRP. They can transact in fiat currencies and still benefit from instant transfers, so the success of Ripple Payments will not necessarily lead to a rise in the price of XRP.

This makes XRP a highly speculative cryptocurrency, and it is very difficult to predict where it will move next.

Don’t get me wrong, Bitcoin is also a speculative asset. Despite the SEC’s blessing and bullish price targets from leading experts, investors are still buying them because they hope their price will rise, not because they generate profits or have any real-world use.

However, Bitcoin He has It has proven itself as a good store of value so far. This alone will make it an attractive place for investors to park some of their money for the foreseeable future, and ETFs make it easier than ever for them to do so. As a result, I think Bitcoin has a better chance of achieving an uptrend in 2025 of XRP.