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

Industry-leading cryptocurrencies like Bitcoin (CRYPTO: BTC) are responsible for most of that added worth, but many tokens at the more speculative complete of the trade have also delivered solid gains. Even XRP (CRYPTO: XRP), which was under a dim regulatory cloud until recently, is up by 250% in 2024.

Falling yield rates are driving demand for growth assets like stocks and cryptocurrencies. Investors are also optimistic that the incoming Trump administration will be more crypto-amiable than previous administrations. That could set the stage for recent opportunities for the industry to make worth.

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

The case for XRP (Ripple)

Global banking is complicated. Sending money around the globe can receive days. Some financial institutions use the SWIFT remittance network, whereas others don’t, which means they require an intermediary to act as a middleman for each trade.

A corporation called Ripple sought to fix that issue. Its Ripple Payments (formerly RippleNet) network connects with 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, an American lender might send XRP to a Japanese lender rather than sending American dollars, which would eliminate money trade fees and other trade costs. The two banks can then handle their own conversions from XRP to the fiat money of their selection.

There are 100 billion XRP tokens in existence. 57 billion are in circulation, and Ripple holds the other 43 billion, releasing up to 1 billion per month to meet institutional demand. In 2020, the U.S. stocks and bonds and trade percentage (SEC) sued Ripple, because the regulator believed the XRP token should be classified as a financial safety (like a distribute or a debt safety), which would place tight restrictions on how it is issued and how the corporation operates.

The lawsuit was partially resolved in August 2024. Ripple was hit with a $125 million fine. The judge determined that XRP was only a safety in sure situations, such as when recent tokens are sold to institutions, but not when it’s traded on crypto exchanges or used in transactions.

The SEC is appealing the selection, but President-Elect Donald Trump recently nominated pro-crypto businessman Paul Atkins to run the regulatory agency during his administration (pending Senate approval). Therefore, investors are hoping that Ripple’s legal woes will disappear after Jan. 20, once the recent government takes office.

That’s why the bulk of XRP’s year-to-date boost occurred after the election on Nov. 5. But the token is market activity at $2.21 as of this writing, which is still well below its record high of $3.40 from 2018. It could shift higher next year, but XRP is still a speculative resource, so investors should exercise caution.

The case for Bitcoin

Unlike XRP, Bitcoin isn’t backed by any person or corporation that can issue more supply. There are 19.8 million Bitcoins in circulation correct now, but there will only ever be a maximum of 21 million. The total supply is expected to be fully mined by the year 2140.

As a outcome, Bitcoin has never faced the regulatory woes that Ripple did. In truth, the SEC even approved dozens of Bitcoin trade-traded funds (ETFs) this year, which provide financial advisors and institutional investors a safer, regulated way to own it. The Bitcoin ETF industry already manages more than $110 billion in assets, so demand is incredibly powerful.

Bitcoin consistently climbed to recent highs even after suffering steep corrections over the years, which isn’t the case for most cryptocurrencies. Along with its limited supply and decentralized nature, that’s a key rationale why investors are warming up to it as a factual store of worth.

Some analysts refer to Bitcoin as a digital version of gold. The total worth of all above-ground gold reserves currently stands at $17.7 trillion, so Bitcoin’s trade capitalization ($1.9 trillion as of this writing) would have to develop by 831% to catch up. That implies a worth of around $893,000 per Bitcoin.

Then there is Michael Saylor, the co-founder of MicroStrategy, which owns over 439,000 Bitcoins (which is more than 2% of the total supply). He predicts Bitcoin will soar to $13 million per coin by the year 2045, because he thinks the U.S. could establish a digital assets framework that will open the door to recent use cases and pave the way for widespread adoption.

Since that implies a Bitcoin trade capitalization of $257 trillion, which is almost nine times the size of the entire U.S. economy in 2023, $13 million per coin is probably a little optimistic, even financial reporting for the dollar’s worth rise in the next two decades.

The verdict

The Ripple Payments network is very innovative, but there’s a hitch: Banks aren’t required to use XRP. They can transact in fiat currencies and still advantage from instant transfers, so the achievement of Ripple Payments won’t necessarily send the worth of XRP higher.

That makes XRP a highly speculative cryptocurrency, and it’s very challenging to forecast where it will shift next.

Don’t get me incorrect — Bitcoin is also a speculative resource. Despite the SEC’s blessing and an avalanche of bullish worth targets from prominent experts, investors still buy it because they aspiration it will rise in worth, not because it generates profits or has any utility in the real globe.

However, Bitcoin has proven itself a excellent store of worth so far. That alone will make it an attractive place for investors to park some of their money for the foreseeable upcoming, and ETFs make it simpler than ever for them to do so. As a outcome, I ponder Bitcoin has a better chance to deliver upside in 2025 than XRP.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy.

The Motley Fool is a USA TODAY content associate offering financial information, analysis and commentary designed to assist people receive control of their financial lives. Its content is produced independently of USA TODAY.

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