Better Buy During the Crypto Crash: XRP or Shiba Inu?
Key Points
XRP and Shiba Inu were incredibly profitable, but they're down big now along with the rest of the crypto market.
XRP is more likely to rebound for its role in international payments.
Shiba Inu is a hype-based meme coin without any real utility.
- 10 stocks we like better than XRP ›
XRP (CRYPTO: XRP) and Shiba Inu (CRYPTO: SHIB) don't share much in common, but they both have passionate followings, largely because they delivered staggering returns to early buyers. They're also trading well below recent highs amid the crypto market downturn.
If you're weighing which one is a better buy-the-dip candidate, there's a clear answer.
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To be clear up front, both are risky, as is usually the case when investing in cryptocurrency. However, the coins present very different levels of risk.
Shiba Inu is a meme coin that began with a publicity stunt. The anonymous founder, Ryoshi, sent half of all SHIB tokens to Ethereum co-founder Vitalik Buterin. It worked in the sense that Shiba Inu's price skyrocketed in 2021, but from a long-term perspective, there's no reason to donate half of your cryptocurrency's token supply -- unless it's not a serious project in the first place.
XRP's story is much different. Ripple, a blockchain company, built XRP to facilitate international payments for financial institutions. Banks can convert their own currencies into XRP and use it for cross-border payments, instead of maintaining pre-funded accounts in other currencies. Over 300 financial companies work with Ripple, and although only a small portion use XRP, it still shows that the cryptocurrency has legitimate utility.
The XRP Ledger (XRPL), XRP's blockchain, also supports smart contract functionality nowadays. Like Ethereum and other blockchains, developers can use it to launch decentralized apps (dApps). Since XRP is the XRPL's native cryptocurrency, users need it to pay transaction fees.
XRP is a volatile asset, and it's not guaranteed to recover, but it's a serious project that serves a real purpose. Shiba Inu's only purpose is amusement, which doesn't make for a strong investment thesis. If you're going to invest in one, make it XRP. Just be careful not to put too much of your portfolio into it, given the risk involved.
Should you buy stock in XRP right now?
Before you buy stock in XRP, consider this:
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Lyle Daly has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum and XRP. The Motley Fool has a disclosure policy.
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