Should You Buy in 2025: XRP or BTC?

Bitcoin (CRYPTO: BTC) is the largest cryptocurrency in the world, with a market capitalization of $1.8 trillion, accounting for over half of the total value of all coins and tokens in circulation across the industry. It has high demand from a large number of investors who see it as a legitimate store of value, which could pave the way for significant growth in the long term. On the other hand, XRP (CRYPTO: XRP) was created by a company called Ripple to standardize transactions in its global payment network. Therefore, unlike most other cryptocurrencies, it has a real-world purpose, which could drive its value higher over time. Bitcoin and XRP achieved returns of 119% and 235% respectively last year, but as 2025 approaches, which coin will be more worth buying? The Case of XRP: The SEC's Change The Ripple payment network is designed to help global banks make direct payments to each other, eliminating the need for intermediaries, allowing money to flow across borders instantly. Ripple created XRP to give banks the opportunity to standardize those transactions -- it only costs 0.00001 XRP (a tiny fraction of 0.01 dollars) to send a cross-border remittance, making it much cheaper than sending fiat currencies, which can incur significant foreign exchange fees. XRP has a total supply of 100 billion tokens; 58.4 billion are in circulation, while Ripple controls the remaining 41.6 billion and releases them gradually to meet demand. Since the company is actually the issuing entity, the U.S. Securities and Exchange Commission (SEC) sued the company in 2020, arguing that XRP should be classified as a financial security, similar to stocks or bonds. If the SEC wins the lawsuit, Ripple will be forced to change its business model or operate under a very strict regulatory framework. However, in August 2024, a judge ruled that XRP can only be a security in certain cases, such as when it is issued to banks, but not when it is used for transferring money or trading on cryptocurrency exchanges. Ripple has been fined $125 million according to the ruling, but investors view this outcome as a victory. The SEC has appealed the decision, but the new leadership of the agency under the Trump administration has temporarily halted the lawsuit with the aim of reaching a settlement. Things could get even better for Ripple as the new SEC chairman, Paul Atkins, was sworn in last Monday, April 21. Before taking on the highest position, Atkins was a co-chair of a cryptocurrency advocacy organization called Token Alliance, and a member of the advisory board at Securitize, a company that helps tokenize real assets on the blockchain to make them easier to invest in. In short, he is likely to support innovative cryptocurrency companies like Ripple rather than hinder them. The Case of Bitcoin: A Reliable Store of Value Bitcoin does not have a real utility like XRP, but it has avoided regulatory scrutiny due to its unique qualities. It has a fixed supply of 21 million coins that will be fully mined by around 2140, and it is completely decentralized, meaning it cannot be controlled by any company, individual, or government. Therefore, by definition, it is not a financial security. In fact, the SEC has approved dozens of Bitcoin exchange-traded funds (ETF), providing financial advisors and institutional investors the opportunity to own cryptocurrency with the safety of regulatory oversight. Many of those investors were unable to own Bitcoin before the ETF due to the risks associated with holding money in digital cryptocurrency wallets that can be easily hacked. Bitcoin ETF has attracted around $110 billion in inflows so far, indicating the level of pent-up demand that awaits. With this cryptocurrency continuously reaching new highs since its creation in 2009, a growing group of investors is describing it as a digital version of gold -- in other words, they believe it is a legitimate store of value. ETFs allow more investors to take advantage of that idea. Cathie Wood from ARK Investment Management believes that institutional investors could eventually allocate 5% of their assets into Bitcoin ETFs, which could lead to a price of $3.8 million per coin by 2030. This implies an astonishing increase of 3,942% compared to the trading price at the time of writing. However, it will give the cryptocurrency a market cap of $79.8 trillion, which is more than three times higher than the combined value of all gold reserves on the ground (ở $22.1 trillion as of the time of này) writing. Therefore, that price target can be a bit ambitious. If Bitcoin were on par with the market capitalization of gold, then it would translate to a price per coin of $1,052,000, which would still represent a massive return of 1,019% from here. And there is another potential tailwind ahead. The U.S. government has recently created a strategic Bitcoin reserve fund, which will initially store 207,189 coins that they have seized from criminal enterprises. With Congress's approval, the government could become an active buyer of it in the open market ( just like they occasionally buy gold ), which would be extremely bullish. Conclusion Both Bitcoin and XRP have fallen from their highs in December, as investors cut back their exposure to risky assets amid ongoing economic and political instability. However, history shows that this sell-off could be a buying opportunity for only one of these two cryptocurrencies. Bitcoin has continuously risen to new record highs since its creation, thanks to a growing group of buyers increasingly confident in its store of value potential. On the other hand, XRP has not set any new records since 2018 -- even the recent price surge after the elections did not reach its target. Although XRP is designed for the Ripple Payments network, banks do not actually need to use it. They can still benefit from the network's instant transfers even if they use fiat currency, which means that the success of Ripple Payments does not necessarily lead to a higher price for XRP. In other words, speculators may play a much larger role in determining the value of XRP compared to demand from the Ripple Payments network. Therefore, Bitcoin could be a better investment in 2025 ( and beyond ), especially when the US government has set up a strategic reserve fund. It's hard to think of a more bullish catalyst than the world's largest economic power potentially becoming an active buyer one day.