Better Buy: XRP (Ripple) vs. Bitcoin

There haven't been many dull moments in the cryptocurrency industry lately. The Trump administration took over in January, and there has been a monumental pivot to a much more pro-cryptocurrency approach. The president ordered the creation of strategic reserves for digital assets, and regulators have abandoned numerous lawsuits against companies in the crypto sector.

Despite all this, Bitcoin (CRYPTO: BTC) and XRP (CRYPTO: XRP) (Ripple) are down in 2025, though XRP has vastly outperformed Bitcoin during the past 12 months. It's a bit of a head-scratcher, especially for Bitcoin, the largest and most prominent cryptocurrency.

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Is XRP's relative strength a coincidence, or is it the superior cryptocurrency investment now? Here's a look at whether XRP or Bitcoin is the better buy today.

Tremendous catalysts for XRP and Bitcoin -- or at least they were supposed to be

XRP and Bitcoin are two of the four largest cryptocurrencies. XRP has a $125 billion market cap, while Bitcoin's market value is a whopping $1.7 trillion. Ripple Labs, a financial technology company, created XRP to facilitate cross-border transactions on its blockchain-based Ripple network.

Bitcoin is the original cryptocurrency, likened to gold. It is a decentralized digital currency that investors and organizations can accumulate to hedge against inflation or use as payment where it's accepted.

Cryptocurrencies can be a polarizing topic among investors because their value depends solely on supply and demand. They don't represent any hard asset or underlying business like commodities, real estate, or stocks.

What is the best way to drive demand for cryptocurrencies? Increase adoption. The more the global economy adopts cryptocurrencies, the more likely that demand (and prices) will increase.

Recent actions by the U.S. government could move the needle in that respect for XRP and Bitcoin. The Trump administration announced it would begin stockpiling certain digital assets it seizes from criminal activities and forfeitures instead of selling them. Ripple's chief executive officer anticipates that the stockpile will include XRP.

Additionally, regulators dropped their appeal in a long-running lawsuit against Ripple. The litigation started in 2020 and was arguably a roadblock to more financial institutions using the Ripple network.

The U.S. government is also creating a dedicated Bitcoin reserve. It will initially fill it with seized Bitcoin, but could buy Bitcoin in the future.

Why have cryptocurrencies fallen flat? This could be why

This is a huge, positive change from the government's previous attitude toward cryptocurrencies. One might assume that XRP and Bitcoin would have soared after the March announcements. But this seems to be a case of buying the rumor, selling the news.

Donald Trump included cryptocurrencies in his presidential campaign messaging. Cryptocurrencies and the broader market rallied strongly after the election in early November once it became clear that a pro-cryptocurrency administration was taking over.

But after the inauguration, some of the administration's policies, such as tariffs, have clouded the market's outlook, and investors seem to have moved away from riskier investments, like technology stocks and cryptocurrencies. You can see that XRP, Bitcoin, and the technology-heavy Nasdaq Composite (NASDAQINDEX: ^IXIC) all retreated from their highs in mid-January:

XRP Price data by YCharts

As important as these developments may eventually prove for XRP and Bitcoin, they seem to have been overshadowed by broader market volatility.

Buy XRP or Bitcoin?

During the past decade, cryptocurrencies have experienced dramatic boom-and-bust cycles. Although there's no guarantee prices will always rebound, this is normal volatility, historically speaking. The important thing is to manage your risk and keep cryptocurrencies limited to a small portion of your total portfolio.

If this is a new crypto winter, there's no telling how low prices could go. XRP has performed well during the past year, but investors will sleep better at night holding Bitcoin, the most established and prominent cryptocurrency by a country mile.

That's not to say that nobody should buy XRP. With the lawsuit behind it, XRP could be a long-term winner if financial institutions use Ripple's network more for cross-border payments.

But ultimately, I think it's telling that the government is dedicating a separate reserve to Bitcoin. It's the better buy during these uncertain times.

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Justin Pope 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.