The crypto trade is in full swing. The price of Bitcoin has surged since election night and briefly flirted with $100,000. Investors are bullish on a better regulatory environment under President-elect Donald Trump, as well as a lower interest rate environment, in which crypto has previously performed well.
However, Bitcoin is not the only cryptocurrency that has made gains. It’s not uncommon for other cryptocurrencies to follow Bitcoin’s lead because it’s a bellwether for the industry. Dogecoin (DOGE -3.99%) and XRP (XRP 17.28%) have done just that, and both surged in the wake of the election, outperforming Bitcoin.
Now, with the industry starting to kick into high gear, which is the better buy?
Dogecoin Price data by YCharts
Dogecoin: The first meme token
Software engineers Billy Markus and Jackson Palmer created Dogecoin as a joke in the early days of crypto in 2013. They based the token around a meme of a Shiba Inu dog.
But to their surprise, their joke became an instant success — talk about creating a currency out of thin air. Dogecoin really rose to widespread notoriety during the meme stock and crypto frenzy during the brunt of the pandemic, when celebrities and tech gurus like Elon Musk embraced and even purchased the token.
Many believe Dogecoin has no real utility other than for blockchain payments, which almost every cryptocurrency offers. The token has an unlimited supply, although there is a fixed reward of 10,000 Doge for each new block. One of the big selling points for Bitcoin is its finite supply, which many believe makes it a potential hedge against inflation.
One thing Dogecoin has undeniably done well is take advantage of the ability to create a community and go viral. That is likely the biggest reason the token has over a $59 billion market cap and is the seventh-largest cryptocurrency in the world. Celebrities like Musk and Mark Cuban have embraced the token and allowed Doge payments for their various businesses.
Having Musk and his 206 million-plus followers on X on board is a powerful marketing tool. When Musk tweets something about Dogecoin on X, it usually becomes a catalyst for the token.
XRP: Designed for cross-border payments
While all cryptocurrencies can in theory conduct cross-border payments, the company Ripple specifically designed XRP for this use case. XRP can process transactions in three to five seconds and settle over 1,500 transactions per second, making it ideal for commercial use. Additionally, Ripple, the company behind XRP, pre-mined 100 billion tokens and uses a consensus protocol instead of the mining process to validate transactions. This makes the token more energy-efficient and requires fewer fees for each transaction.
While 100 billion is a large number, it is still a fixed amount, making it better able to hedge against inflation than Dogecoin. XRP could also be a candidate to become a spot exchange-traded fund (ETF), which would increase liquidity and exposure for the token. Several companies have taken initial steps to begin the ETF process, and XRP recently began trading on Robinhood.
XRP has also found itself in the limelight over the last few years, but not in the way it would like. The Securities and Exchange Commission (SEC) sued Ripple and XRP founders Christian Larsen and Brad Garlinghouse for selling XRP in 2013 as an unregistered security. The case had broad ramifications for the crypto sector, as the SEC and stakeholders tussled over the regulatory jurisdiction of crypto.
A federal judge has already ruled in Ripple’s favor, but the SEC appealed parts of the decision earlier this year. However, with SEC Chair Gary Gensler to step down once President-elect Donald Trump takes office in January, the lawsuit could wrap up sooner than expected.
Which to buy?
While I won’t deny Dogecoin’s ability to appreciate in a bull crypto market, I still like XRP better. The token has a better use case, in my opinion, a fixed supply, and is more likely to see spot XRP ETFs — not that Dogecoin couldn’t eventually get those as well. I also think the lawsuit has been an overhang on XRP’s price in recent years, which should soon change.
