XRP is one of the most popular altcoins, and it has some notable advantages over Bitcoin.
Bitcoin (BTC 0.44%) is the largest cryptocurrency by a wide margin, worth nearly $2 trillion (as of Jan. 14). Because of its value and the immense cost of buying just 1 BTC, many crypto investors prefer to look for altcoins — a term for all the cryptocurrencies other than Bitcoin.
A popular choice is XRP (XRP 1.47%), which has a market cap of $127 billion. That theoretically gives it more growth potential, and over the last five years, XRP has increased by 666% compared to Bitcoin’s returns of 169%.
If you’re wondering whether you should invest in XRP instead of Bitcoin for your crypto portfolio, here’s what you need to know.
Image source: Getty Images.
Key differences between Bitcoin and XRP
Bitcoin and XRP are both decentralized digital currencies that use blockchain technology to record transactions. Bitcoin was the first, and its anonymous founder launched it in 2009 as a digital currency for online payments, with no reliance on a central banking system.
XRP has a much different origin story. Ripple, a private company, launched XRP in 2012. Where Bitcoin’s purpose was to eliminate the need for financial institutions, Ripple designed XRP to work with financial institutions, making cross-border payments faster and cheaper.
Of the two, XRP works much better as a payment method. Transactions typically process in three to five seconds and cost well under $0.01. Bitcoin transactions, on the other hand, normally take about 10 minutes, and the current average fee is just over $0.80.
Today’s Change
(-0.44%) $-418.19
Current Price
$95066.00
Key Data Points
Market Cap
$1.9T
Day’s Range
$94869.00 – $95503.00
52wk Range
$74604.47 – $126079.89
Volume
19B
However, hardly anybody uses Bitcoin as a payment method anymore. It’s an investment, often referred to as a form of digital gold. A fairly low maximum supply of 21 million BTC helps with that by providing built-in scarcity. XRP exists in more of a middle ground between investment and payment method.
XRP’s role in the global banking system
The value of XRP is tied to its issuer. Ripple offers a blockchain-based global payments network, Ripple Payments, which banks can utilize for fast and affordable international transactions. Ripple Payments includes an On-Demand Liquidity (ODL) feature that incorporates XRP.
Banks have traditionally maintained pre-funded accounts with foreign currencies. If a bank uses ODL with Ripple Payments, it can instead convert its local currency to XRP to transfer funds. The recipient can then convert XRP into its own currency.
As financial institutions adopt XRP for ODL, demand will likely grow, and the price should increase. There are a few hurdles this cryptocurrency has to overcome, though.
While Ripple has partnered with over 300 financial institutions, many of them only use Ripple Payments without ODL. In the second quarter of 2025, $1.3 billion in transactions were processed through ODL,…
Read More: Should You Forget Bitcoin and Buy XRP Instead?
