XRP vs. Bitcoin: Which Cryptocurrency Will Perform Better in 2026?

XRP (CRYPTO: XRP) and Bitcoin (CRYPTO: BTC) are two of the most popular cryptocurrencies in the world. Bitcoin remains far and away the most valuable, with a market cap of about $1.7 trillion. XRP at around $116 billion is just a small fraction of that, but that's still large enough to make it the fifth-largest cryptocurrency in the world today.

Despite their popularity, neither coin has been performing particularly well this year. Bitcoin has fallen sharply since reaching an all-time high back in October. XRP, which also started out promising, looks to be on track to finish the year in the red.

Heading into 2026, which of these cryptocurrencies looks to be a better buy: Bitcoin or XRP?

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The case for Bitcoin

Bitcoin is the king of the crypto universe, and it enjoys a huge advantage in having strong name recognition that makes it well-known, even among people who don't buy and sell crypto. For anyone new to crypto, they might not know what XRP is or the thousands of other cryptocurrencies out there, but they will probably have heard of Bitcoin.

And there's been a growing acceptance of crypto recently. Vanguard recently announced that it will allow crypto exchange-traded funds (ETFs) on its platform. Although it's not planning to launch its own crypto ETFs, it is opening the doors for 50 million of its clients to be able to access the funds.

It's a potentially huge opportunity for new types of investors to gain exposure to digital currencies. And of course, the main go-to options are likely going to be Bitcoin ETFs, which could help drive up the price of the top cryptocurrency in the process.

With the cryptocurrency getting closer to its April lows, investors may also see an excellent opportunity to invest in Bitcoin. Recently, Standard Chartered reduced its year-end price target for Bitcoin for 2026 amid the cryptocurrency's decline, from $300,000 to $150,000. Although that's a steep drop-off, it's an indication of just how much upside there may still be for the cryptocurrency next year. As of Dec. 18, it was trading at about $87,000.

The case for XRP

XRP's potential centers around the opportunity for it to act as a bridge currency, enabling faster cross-border transactions around the world; it can settle transactions within three to five seconds compared with hours or even days for incumbent transfer systems. With more practical use cases than many other cryptocurrencies, investors are optimistic about its long-term growth.

Ripple, the company behind XRP, has been building up an ecosystem that includes hundreds of banks and financial institutions throughout the world that are using its RippleNet platform. Over time, that can eventually lead to an increase in the use of Ripple's on-demand liquidity, which is where XRP is used to handle cross-border payments.

A positive catalyst to watch out for that can result in higher demand for XRP is the emergence of new spot XRP ETFs, which were first approved in November. Although that hasn't resulted in a surge in demand for XRP just yet, that may change as they rise in popularity.

Overall, with some exciting growth catalysts ahead and a relatively modest market cap, XRP has the potential to generate strong gains in 2026.

Why Bitcoin is likely to do better next year

Next year could be a tough one for the stock market, as there may not be many more interest rate cuts, and there's still plenty of economic doubt to consider. Given that, I think there's a possibility that the markets may struggle. And if that happens, cryptocurrencies as a whole may not do well.

And at a time when investors may be looking for safety, I believe they will be more likely to put money into Bitcoin rather than XRP, which isn't taking off despite the launch of spot ETFs. Although crypto investments as a whole are risky, Bitcoin still looks to be the safest option among them heading into 2026.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.