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Is Bitcoin or XRP More Likely to Be a Millionaire-Maker? Key Points
Investors have enjoyed tremendous gains in the cryptocurrency market during the past year. Bitcoin has roughly doubled in price, only to be outdone by XRP, which has surged almost 400%.
Bitcoin has long been the flagship cryptocurrency. Meanwhile, XRP has gained significant momentum since the resolution of litigation between Ripple Labs and the Securities & Exchange Commission (SEC), which removed some uncertainty that had weighed on XRP's price for several years.
But which token is more likely to deliver life-changing returns to investors?
Here is what you need to know.
Bitcoin and XRP serve different purposes
Cryptocurrencies lack tangible value, unlike hard assets like real estate or precious metals, or stocks, which represent real businesses with revenue and profits. Cryptocurrency prices tend to be more volatile, and it's harder for a coin's price to increase over time without some purpose or utility.
Many view Bitcoin as a digital version of gold, a potential store of value that investors acquire to protect against the erosion in value of a fiat currency like the U.S. dollar.
XRP is the native token on the XRP ledger, a blockchain-based network designed to facilitate cross-border transactions. It's an alternative to SWIFT, a global messaging network banks use. The XRP ledger can perform transactions faster and at lower fees than SWIFT.
Comparing the floor and ceiling between these two tokens
Put simply, Bitcoin probably has a higher floor.
Even at a $2.3 trillion market value, Bitcoin still has room to grow relative to other assets in the global economy. Bitcoin becomes increasingly entrenched in the economic landscape as society adopts it. Some corporations have begun keeping Bitcoin on their balance sheets, and the U.S. government announced a strategic Bitcoin reserve earlier this year.
Developments like these all further reinforce Bitcoin's legitimacy and value. Although Bitcoin's price has fluctuated over the years, its steady and continued adoption is a sign that it's probably here to stay.
XRP, with a much smaller fully diluted market value of just $156 billion, has a strong argument for upside potential. The SEC lawsuit likely stunted its adoption, but now that the lawsuit is over, it's game on. Encouraging developments include the launch of XRP-backed exchange-traded funds and Ripple Labs creating a stablecoin pegged to the U.S. dollar using the XRP ledger.
Which is more likely to be a millionaire maker?
Cryptocurrencies are still relatively new in the broader asset landscape, and it may take years for either asset to gain recognition and trust. Bitcoin is far closer to realizing that potential than XRP, making it the more likely millionaire-maker right now. XRP's use cases are only just beginning, and SWIFT still dominates cross-border payments.
Bitcoin has grown to become a mainstream asset and still has room to increase in value, which can make investors wealthy, even if it takes another decade or longer.
Instead, play the long game. Including Bitcoin and XRP as small components within a diversified portfolio could help generate returns over time while minimizing risk.
This article has been published in fool.com via Yahoo News.
