The Best Cryptocurrency to Buy With $100 Right Now

It's a risky move to invest your life savings in cryptocurrencies, since they're much more volatile than stocks and other traditional assets. However, some of the more promising cryptocurrencies might still be worth nibbling on with some spare cash you can afford to lose.

For example, a $100 investment in XRP (CRYPTO: XRP), the native cryptocurrency of the XRP Ledger, at its earliest trading price of $0.005 in 2013 would be worth $53,000 today. Let's see why its price soared -- and why it might still be one of the best tokens to buy with $100.

Why did XRP's price skyrocket?

The founders of Ripple Labs, a provider of blockchain-based money transfers, launched the XRP Ledger as the technological bedrock of its business in 2012. It promoted XRP as a faster, cheaper, and more secure alternative to traditional SWIFT (Society for Worldwide Interbank Financial Telecommunication) transfers.

Ripple's founders subsequently launched the XRP crypto, and they minted its entire supply of 100 billion coins before its market debut. XRP still has a supply of 99.98 billion coins, but its supply gradually decreases because a tiny fee of XRP is burned off with each transaction, permanently removing it from the supply. To fund Ripple's expansion, its founders sold a lot of those XRP coins to raise cash. In response, the Securities and Exchange Commission (SEC) sued Ripple in 2020 and accused it of peddling its tokens as unlicensed securities. That lawsuit caused Ripple to lose several of its top money transfer customers, and XRP was abruptly delisted from the major crypto exchanges.

As a result, XRP's price sank from its all-time high of $3.84 in January 2018 to a multiyear low of $0.31 per token in 2022. The interest rate hikes in 2022 and 2023, which contributed to a crypto winter across the broader market, exacerbated that pressure.

But in 2023, a district judge ruled that the XRP tokens sold on public exchanges weren't securities, but the tokens sold to institutional investors were securities. Ripple was fined $125 million, which was much lower than the SEC's initial demand for $2 billion, and an injunction blocked it from directly selling additional coins to institutional investors.

That lawsuit finally ended this August, and the major crypto exchanges relisted XRP. Several asset management firms submitted their applications for spot price XRP exchange-traded funds (ETFs), while one unique ETF -- the REX-Osprey XRP ETF -- was cleared to start trading on the CBOE with a much shorter approval time.

The Trump administration even named XRP as one of the five digital assets -- alongside Bitcoin, Ethereum, Solana, and Cardano -- for its planned strategic digital asset stockpile. All of those catalysts, along with declining interest rates, drove the crypto bulls back to XRP.

Why could its price climb even higher?

But unlike many of the other cryptocurrencies that set fresh highs during the past year, XRP remains almost 40% below its all-time high. Its biggest headwinds have dissipated, but its longer-term catalysts are murkier. It can't be valued by its scarcity like Bitcoin, which is still actively mined and seen by many as digital gold and it can't be valued by the growth of its developer ecosystem like Ethereum.

Instead, XRP's value is primarily pinned to its usage as a bridge currency between two volatile or illiquid assets. For example, a transfer between two thinly traded currencies usually requires an intermediary conversion to a more widely used fiat currency (like the U.S. dollar), but that process is time-consuming and racks up additional foreign exchange fees. With a bridge transfer, both currencies are converted to XRP and instantly transferred as a faster and cheaper rate.

Back in June, Ripple's Chief Executive Officer Brad Garlinghouse said XRP could claim as much as 14% of SWIFT's current volume by 2030. That increased adoption could make it an attractive haven cryptocurrency like Bitcoin, even if it isn't as directly comparable to gold and other hard assets.

Unlike Ethereum, XRP doesn't natively support smart contracts which are used to develop decentralized apps (dApps). It only supports simpler programs. But in the near future, XRP's developers might add support for Ethereum-based smart contracts to its blockchain through sidechains. That cross-compatibility could drive more developers to integrate XRP transactions into their decentralized finance (DeFi) applications.

The SEC could approve applications for new XRP ETFs in the near future, and those approvals could draw in more retail and institutional investors. Ripple also recently applied for a U.S. bank charter to become a full-fledged digital bank, and that approval could make XRP even more appealing.

Will XRP set fresh highs over the next decade?

With a market cap of $145 billion, I doubt XRP will replicate its 52,900% gain of the past 12 years during the next decade. But with its regulatory challenges in the rear-view mirror and plenty of irons in the fire, it could set fresh record highs during the next few years. It's still a speculative token, but it might be worth a modest $100 investment.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.