Better Buy With $5,000 Right Now: Ethereum or XRP?

Alex Carchidi, The Motley Fool

Tue, Apr 1, 2025, 2:00 AM 5 min read

Ethereum (CRYPTO: ETH) and XRP (CRYPTO: XRP) aren't in direct competition in terms of their target users or their general objectives. But if you're looking to invest $5,000, it makes more sense to concentrate your capital into just one, rather than spreading it between both.

When it comes to the positioning of these two assets, their situations are more or less the opposite. That means that for most investors, one of them is a much better option to buy now. Let's explore why that's the case, and figure out which it is.

XRP is a chain in the midst of ascendance.

It's gaining new features, such as automated market maker (AMM) functionality and new tools for regulatory compliance, launching new stablecoins in international markets, and making big strides with regulators in the U.S., which recently dropped a lawsuit against Ripple, the company that issues XRP. It's also making its chain a more appealing place for financial institutions to do business by offering them a blockchain platform to trade their real world assets like bonds and real estate. If a good regulatory environment persists, the crypto could also get a boost sometime this year if regulators approve exchange-traded funds (ETFs) that hold XRP.

As if that weren't enough, it's gaining traction in countries like the UAE and Portugal, where it will likely see further adoption by offering lower-cost money transfers to banks. That wouldn't be happening if the financial institutions there didn't see value in using XRP's network. It's a very clear sign that the core investment thesis for buying the coin is alive and well. That wouldn't be happening if the chain's leadership was pursuing a faulty strategy that didn't resonate with its target audience.

Alas, Ethereum can't claim any of the same accomplishments, and it has been struggling a lot recently.

Amid a leadership shakeup at the Ethereum Foundation, ongoing difficulty in securing interest from investors and developers faster than its arch-rival Solana, and underperforming decentralized finance (DeFi) projects relative to its competitors, the chain is somewhere between severe doldrums and a crisis. Despite making significant progress on one of its long-standing technical problems (high gas fees for users), it still isn't fast enough or cheap enough compared to its peers. And it doesn't have too much in the way of potential regulatory catalysts coming up compared to XRP.

There's no debating that Ethereum is still a major cryptocurrency. But unless something dramatic changes to keep it competitive, it might not retain that status forever.