Should You Buy XRP With $1,000, or Cardano?

Alex Carchidi, The Motley Fool

Sat, Mar 22, 2025, 8:57 AM 4 min read

Even if you're only trying to place a smaller investment of around $1,000 or so, it makes sense to bet on the fastest horse. On that note, both XRP (CRYPTO: XRP) and Cardano (CRYPTO: ADA) have experienced significant catalysts lately, including news of their potential inclusion in a planned United States Digital Asset Stockpile, assuming it's actually implemented.

There might be more good news in store for both of them in the future, too. But which one is going to be the better investment to hold over the next five years, and why?

XRP and its chain are tightly focused on serving financial institutions that need to transfer large sums of money across international borders.

When those institutions use XRP for transfers instead of a legacy technology like the Society for Worldwide Interbank Financial Telecommunication (SWIFT), they can reduce their transfer costs substantially while also avoiding currency exchange fees, which helps them to shore up their bottom lines.

So there's a core incentive to use the coin, which is also the main reason it has value. As coinholders need to buy more XRP to process larger transfers, there's also a built-in mechanism for it to gain in value over time, provided that, on average, holders are deriving utility from it.

At the same time, Ripple, the business that issues XRP, is developing the chain to appeal to that same group of clients even more by building features like real-world asset (RWA) tokenization. It sounds complicated, but essentially the idea of RWA tokenization is taking assets like U.S. Treasuries, commodities, or real estate and inputting them such that they're trackable and tradeable on XRP's blockchain.

For banks and other financial players, having a centralized ledger to track those assets, as well as more liquid assets like XRP and stablecoins, is more efficient since there are fewer steps that they need to take before transferring or selling them.

So there's more than one driver of demand for the coin, and reason to believe that Ripple will keep creating more drivers for more demand.

Cardano was created as a response to the problems of Ethereum, like high gas fees as well as its sometimes chaotic approach to its technology development. Thus, Cardano is a smaller, cheaper-to-use, slightly faster, and more carefully managed version of its larger competitor. The last point is actually the most important for its merit as an investment.

Compared to the development strategies of other chains, Cardano's approach is highly collaborative, deliberate in its pace, and fairly academic in nature. Peer review is a core pillar of its development cycle, which meshes well with its intention to be highly democratized and decentralized in its governance. Importantly, those ideals are distinct from something you would expect to be marketed to a particular demographic for the purposes of making money in some way, like XRP.