Better Crypto Buy: Cardano vs. XRP

The cryptocurrencies XRP (CRYPTO: XRP) and Cardano (CRYPTO: ADA) have almost nothing in common. XRP is a digital currency used in the RippleNet payment system, powering international transactions with low fees and instant settlement. Cardano is a high-speed platform for executing smart contracts, based on reams of academic research.

But you can invest in both cryptocurrencies, and both are popular names in today's crypto market. Which one is the better buy today, then?

Let's take a look.

November 2024 gave investors crypto whiplash

Both of these cryptocurrencies entered November 2024 in a somber mood. At the end of October 2024, XRP had fallen 47% in three years while Cardano plunged 78% lower. Investors were looking for positive news, a fresh catalyst -- anything that could start a serious recovery.

One election day later, Cardano and XRP were back on track. The Trump campaign made bombastic promises about becoming the most crypto-friendly administration ever, and it walked away with a win. As a result, many cryptocurrencies soared in November. XRP and Cardano jumped higher than most, more than tripling their prices that month. By contrast, Ethereum (CRYPTO: ETH) and Bitcoin (CRYPTO: BTC) only gained 35% in those 30 days.

XRP's numbers gave investors whiplash -- down sharply over three years at the end of October, then more than tripling in November and flipping to big multiyear gains. Cardano still had some lost ground to cover with a 33% price drop across the same span.

The price drama changed in tone, but investor eyes are still glued to Cardano and XRP headlines. As of Dec. 8, the S&P 500 (SNPINDEX: ^GSPC) stock market index is up 16% year to date. XRP has bucked and rolled, coming back almost exactly where it started in January. And Cardano couldn't hold on to its newfound strength; this cryptocurrency is down 50% in 2025.

At this point, XRP is largely hanging on to the gains it posted around the 2024 election. Cardano, on the other hand, has retreated to prices last seen right after that event.

Builders versus banks: Cardano and XRP are betting on different plays

The price charts are history, and the future is a mystery. The organizations behind XRP and Cardano are taking action to keep their cryptocurrencies relevant in the long term. Here are some of the key catalysts buzzing around these two crypto names today, starting with Cardano:

• Cardano's full-time developer community has grown 20% larger over the past two years. Popular projects include web3 crypto wallets, decentralized finance (DeFi) platforms, and online multiplayer games. Any of these Cardano-based apps could hit the big time and start breaking down the barrier between old-school app development and blockchain-powered decentralized apps.
• Its research-backed core development should make the coin resistant to quantum computing decryption threats earlier than most. It's still a complicated task, but quantum-resistant encryption algorithms already exist. I expect this academically minded team to call for changes long before quantum computers actually pose a threat.
• At the same time, the Cardano blockchain is going through several technical changes that speed up its smart contract execution. Its chief rivals are all performing similar upgrades, of course. It's still encouraging to see the Cardano team being on the ball. The cryptocurrency must be ready for a steep increase in real-world usage, just in case one of those apps becomes a superstar in the web3 era.
• Turning to XRP, the RippleNet payment platform grows more sophisticated over time. XRP's backers are setting up partnerships with regional banks around the world, adding a richer information set to each transaction, and boosting the amount of easily moved capital inside the system.
• As part of the capitalization push, the XRP-based Ripple USD (CRYPTO: RLUSD) stablecoin has been available for almost a year now.
• Following in the encrypted footsteps of Bitcoin and Ethereum, the first XRP-based exchange-traded funds (ETFs) were approved last month. The four XRP ETFs are still small with roughly $850 million in total assets under management, but the investor assets keep flowing in. Institutional investors now have easier access to XRP investments, which could be a game changer in the long run.

Image source: Getty Images.

Why I'd pick Cardano for now

Against this backdrop, I understand if you're bullish about both Cardano and XRP. At the same time, Cardano remains a much smaller smart contracts system than Ethereum, and XRP looks wildly overvalued in 2025. That's plenty of bear food, if you ask me.

Wearing my long-term investor goggles, I see a great long-term future for XRP with many potholes and bear traps in the road ahead. If RippleNet becomes the most popular system in the world for international money transfers, XRP's current price of around $2.00 will look laughably cheap someday. However, existing alternatives are fighting back and modernizing their transaction systems. XRP could very well become a forgettable footnote in crypto history if one of them becomes XRP before XRP can become them. Under these circumstances, I'm not planning to buy more XRP until the price drops to a dollar or less.

So Cardano takes the title with a more reasonable valuation. Cardano's market seems to account for more risks and fewer catalysts than XRP's. It's not a slam-dunk, home run, no-brainer kind of win -- just a more reasonable risk-to-reward balance. That's still a clear Cardano win, though.

Anders Bylund has positions in Bitcoin, Cardano, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.