Better Buy in 2025: XRP (Ripple), Dogecoin, or Bitcoin?

The total value of all cryptocurrencies in circulation soared to a new record high of $3.9 trillion shortly after Election Day on Nov. 5 last year. The breakout can be attributed to President Donald Trump's pro-crypto stance and the friendly policies that may follow now that his administration is officially in office.

Between Nov. 5 and Jan. 17 (the date of this writing), XRP (CRYPTO: XRP) has soared by 539%, Dogecoin (CRYPTO: DOGE) has jumped by 154%, and Bitcoin (CRYPTO: BTC) has climbed by 50%.

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The Trump administration is a positive catalyst for each of those three popular cryptocurrencies for different reasons, but which one will be the better buy in 2025?

The case for XRP: Friendly regulation

The global banking system is complex, and not every institution uses mainstream payments networks like SWIFT (Society for Worldwide Interbank Financial Telecommunication) to process transactions. As a result, international transfers can take days to settle. In 2012, a company called Ripple created a global payments network, called Ripple Payments, to solve that problem.

The network standardizes payment protocols to allow all banks to communicate with one another, no matter what infrastructure they use. That basically means they can settle transactions with one another directly and instantly. Ripple created the XRP cryptocurrency for banks to use in those transactions, so they can save money on currency exchange fees and other costs.

XRP has a total supply of 100 billion tokens. Around 57 billion are in circulation, whereas the other 43 billion are controlled by Ripple, which releases them gradually each month to meet demand from institutions. Therefore, it's very different from a decentralized cryptocurrency like Bitcoin, which has a capped supply and can't be controlled by any person or company.

That's why the U.S. Securities and Exchange Commission (SEC) sued Ripple in 2020, arguing the XRP token should be a registered financial security (like a stock or a bond). Companies that issue securities must operate under a strict set of rules, so Ripple's business faced significant disruption. However, in August 2024, the lawsuit was mostly resolved when the judge only penalized Ripple with a $125 million fine, which investors viewed as a win.

The SEC is appealing the decision, but investors are speculating the case could disappear entirely with Trump's team now in office. The president's pick to run the SEC, Paul Atkins, is a pro-crypto businessman who currently serves as the co-chairman of an industry advocacy organization called the Token Alliance. He is likely to be confirmed by the Senate very soon, so it won't be long before investors know whether Ripple is finally off the hook.

The case for Dogecoin: Elon Musk

I want to start off by reminding readers that Dogecoin was literally created as a joke by its two founders in 2013. However, it took off in 2021 when Tesla CEO Elon Musk started promoting it on social media, sharing memes and engaging in banter with other enthusiasts.

His support hit a new level on May 8, 2021 when he participated in a Dogecoin-themed skit on Saturday Night Live (SNL). By that point, the token was sitting on an incredible gain of 15,769% for the year, but its record high of $0.73 on the night of Musk's SNL appearance proved to be the peak. Once investors realized he didn't have a proper plan to back up his banter, Dogecoin plunged by more than 90%, and it still hasn't fully recovered.

Dogecoin remained dormant for three years up until Trump's election win on Nov. 5. Musk was a major financial supporter of the president's campaign, and when the crypto markets started to soar, his influence over Dogecoin was rekindled. Shortly after the election, Trump announced he would appoint Musk to lead an initiative to cut down on government spending. It will be called the "Department of Government Efficiency," or DOGE for short, which is a reference to the Tesla chief's favorite cryptocurrency.

There is no indication that Dogecoin will play a role in the project, but that didn't stop investors from pushing it to a new 52-week high of $0.47. With that said, considering it's still below its 2021 high of $0.73, maybe investors are actually being more cautious this time around.

Since there are no concrete fundamentals supporting Dogecoin, there is a real risk this latest rally ends the same way as the last one -- in an eventual collapse of 90% or more.

Image source: Getty Images.

The case for Bitcoin: A U.S. government reserve, and more

Bitcoin has a market capitalization of $2.05 trillion, so it makes up more than half of the total value of all circulating cryptocurrencies. It continues to march to new highs thanks to a series of tailwinds, including the approval of dozens of exchange-traded funds (ETFs) by the SEC last year. In other words, while Ripple has been locking horns with the regulator, Bitcoin has won its support.

Trump's election win added fuel to Bitcoin's rally in 2024. He was practically an advocate for the cryptocurrency on the campaign trail, throwing his support behind radical ideas like establishing a strategic Bitcoin reserve within the government. If it were to happen, the U.S. Treasury would potentially become an active buyer of Bitcoin in the open market, which would support its price and also legitimize it as a store of value.

Moreover, Bitcoin bulls like MicroStrategy's Michael Saylor are pushing for the Trump administration to build a digital assets framework (a system of rules and laws) to pave the way for wider adoption. He believes Bitcoin could eventually become the reserve currency for $500 trillion worth of "tokenized" real assets. In other words, he thinks the blockchain will replace existing systems of record, and Bitcoin will be used to buy, sell, and transfer everything from real estate to company shares.

Personally, I think that's a little overambitious. It's more likely Bitcoin becomes a widely recognized store of value, kind of like a digital version of gold, especially now that exchange-traded funds (ETFs) make it easy for financial advisors and institutional investors to buy it in a safe, regulated way.

The total value of all above-ground gold reserves currently stands at $18.4 trillion. Bitcoin's market cap of $2.05 trillion would have to grow by 797% to match that, translating to a price per coin of $924,000. That's certainly more achievable than Saylor's price target of $13 million per Bitcoin.

The verdict

XRP is the most interesting cryptocurrency of this bunch because it appears to have a legitimate use case within Ripple Payments, which should theoretically create value for the long term. But here's the rub: Banks don't have to use XRP to use Ripple Payments, because they can also transact in fiat currencies.

In other words, further upside in XRP doesn't rest on the success of Ripple's payments network. XRP is basically subject to the whims of speculative investors, which means it's not so different from a token like Dogecoin.

Even though Bitcoin is technically also a speculative asset (investors buy it in the hope someone else will pay a higher price in the future), its decentralized nature, its capped supply, and the availability of ETFs have consistently pushed it to new highs. Now, with the potential for a U.S. government Bitcoin reserve on the horizon, I think this cryptocurrency has the best case for upside in 2025 (and beyond).

Should you invest $1,000 in XRP right now?

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Tesla, and XRP. The Motley Fool has a disclosure policy.