3 Reasons Bitcoin Could Outperform XRP (Ripple) and Ethereum Over the Next Year

Source The Motley Fool

When it comes to cryptocurrency, one name stands out above the crowd: Bitcoin (CRYPTO: BTC). The original cryptocurrency accounts for roughly 63% of the entire crypto market cap.

However, Bitcoin is so big that it doesn't always produce the best returns. More recently, XRP (CRYPTO: XRP) has gotten a lot of attention as regulatory pressure eases on the company, and its utility has gotten a major boost from several advancements from Ripple. Meanwhile, Ether (CRYPTO: ETH) is often seen as the backbone of DeFi, with its smart contract blockchain doing most of the heavy lifting in the industry.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

While there's a case to be made for either to outperform Bitcoin, I think Bitcoin will ultimately outperform amid the current environment. Here are three reasons why investors should consider the king of cryptos.

A graphic representation of a Bitcoin token.

Image source: Getty Images.

1. The flight to quality

President Donald Trump has quickly and aggressively enacted wide-reaching tariffs on just about everything imported into the United States since taking office in January. Not only has he announced massive potential tariffs on imports, he's also paused them, said he will carve out exceptions, and unpaused certain tariffs.

All of this leads to massive amounts of uncertainty in the market. It's hard to know what to do with your money if the playing field could completely change tomorrow.

When markets are uncertain, they sell off riskier assets. That's certainly true of the entire cryptocurrency market, and Bitcoin hasn't been immune.

However, of all the cryptocurrencies investors could buy, Bitcoin is the highest-quality investment. It has significant institutional backing and a lot of big stakeholders, and the U.S. government now holds Bitcoin as part of its strategic cryptocurrency reserve. Investors selling risky altcoins are likely to move their money to Bitcoin.

As such, it's no surprise that Bitcoin has held up better than either XRP or Ethereum in the last few months. I expect that will continue to be the case as long as the macroeconomic environment remains uncertain.

2. Investors pulling money out of the U.S. markets

Since Trump's tariff announcement, we've seen both U.S. stocks and U.S. debt decline in value. That's not typically how it works. Remember, investors usually move from risky assets (stocks) to safer assets (Treasuries). However, the decline in Treasuries suggests investors are completely abandoning U.S. markets instead of shifting from risky assets to safer assets.

Those investors will be looking for a safe asset to buy. Foreign debt could be an option; gold is another, but Bitcoin presents an interesting case as well. That's particularly true as a result of a second-order effect from the mass exodus from U.S. securities. The U.S. dollar has grown significantly weaker in the last few weeks.

The U.S. Dollar Index has fallen more than 10% since Trump took office in January. The dollar weakened considerably after the tariffs were announced on April 2, and it failed to bounce back after Trump announced a pause on those tariffs. When the U.S. dollar weakens, it typically results in higher pricing for Bitcoin.

3. Inflation could push the price higher

Bitcoin is seen as a hedge against inflation. Most economists agree the tariffs will be inflationary.

That only makes sense. An escalating trade war with taxes on every import, from manufacturing equipment to parts to final products, will have a huge impact on the final price of goods. Combine that with the weakening U.S. dollar, and we'll see massive inflationary pressure.

Since Bitcoin has a fixed supply, a dollar that can buy less will theoretically apply to Bitcoin as well. That means the price of Bitcoin will go up.

The economics of Bitcoin don't exist in a vacuum, though. The three factors outlined here, all fallout from Trump's tariffs, point to Bitcoin performing relatively well compared to other cryptocurrencies and other assets in general. The longer the macroeconomic environment remains uncertain, the longer the trade war goes on, the more money we'll see flow into Bitcoin compared to other cryptocurrencies. As such, investors may see Bitcoin's dominance of the market extend even further over the coming months.

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

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Adam Levy has positions in Bitcoin, Ethereum, and XRP. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD climbs above $4,250 as Fed rate cut weakens US DollarGold price (XAU/USD) rises to seven-week highs near $4,275 during the early Asian session on Friday. The precious metal extends its upside as the US Federal Reserve’s (Fed) quarter-point rate cut drags the US Dollar (USD) lower. 
Author  FXStreet
Dec 12, Fri
Gold price (XAU/USD) rises to seven-week highs near $4,275 during the early Asian session on Friday. The precious metal extends its upside as the US Federal Reserve’s (Fed) quarter-point rate cut drags the US Dollar (USD) lower. 
placeholder
Pi Network Price Annual Forecast: PI Heads Into a Volatile 2026 as Utility Questions Collide With Big UnlocksPi Network heads into 2026 after a 90%+ 2025 drawdown from $3.00, with 17.5 million KYC users and a smart-contract-focused Stellar v23 upgrade offering upside potential, but 1.21 billion tokens unlocking and heavy exchange deposits (437 million PI) keeping supply pressure and trust risks firmly in focus.
Author  Mitrade
Dec 19, Fri
Pi Network heads into 2026 after a 90%+ 2025 drawdown from $3.00, with 17.5 million KYC users and a smart-contract-focused Stellar v23 upgrade offering upside potential, but 1.21 billion tokens unlocking and heavy exchange deposits (437 million PI) keeping supply pressure and trust risks firmly in focus.
placeholder
Bitcoin Traders Split on Whether BTC Will Drop to $70K or Rebound SoonBitcoin market participants hold divided views for short-term price action, with targets ranging vastly between $150,000 and a potential drop back to $70,000.
Author  Mitrade
Yesterday 06: 56
Bitcoin market participants hold divided views for short-term price action, with targets ranging vastly between $150,000 and a potential drop back to $70,000.
placeholder
Gold jumps above $4,440 as geopolitical flare, Fed cut bets mountGold (XAU/USD) rallies over 2% on Monday, reaching a record high of $4,442 amid rising geopolitical tensions and expectations that the Federal Reserve (Fed) will continue to reduce interest rates next year, pushing US Treasury yields lower.
Author  FXStreet
11 hours ago
Gold (XAU/USD) rallies over 2% on Monday, reaching a record high of $4,442 amid rising geopolitical tensions and expectations that the Federal Reserve (Fed) will continue to reduce interest rates next year, pushing US Treasury yields lower.
placeholder
After Wall Street’s 2025 Crypto Surge, What’s Next for Demand in 2026?​The anticipation of a bullish 2026 for the crypto market faces obstacles, despite 2025's success attributed to favorable regulatory actions and increased acceptance of digital assets by Wall Street.
Author  Mitrade
11 hours ago
​The anticipation of a bullish 2026 for the crypto market faces obstacles, despite 2025's success attributed to favorable regulatory actions and increased acceptance of digital assets by Wall Street.
goTop
quote