Cryptocurrency trading is in full swing. The price of Bitcoin has surged since election night and briefly flirted with $100,000. Investors are optimistic about a better regulatory environment under President-elect Donald Trump, as well as a lower interest rate environment, in which crypto has already performed well.
However, Bitcoin is not the only cryptocurrency to have made gains. It is not uncommon for others cryptocurrencies follow the example of Bitcoin because it is an indicator for the industry. Dogecoin (DOGE -2.50%) And XRP (XRP 27.55%) They did just that, and both surged following the election, outperforming Bitcoin.
Now that the industry is starting to shift into high gear, what is the best buy?
Dogecoin Price data by Y Charts
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: it involved creating a currency out of nothing. Dogecoin really gained widespread notoriety during the meme stock and crypto frenzy at the height of the pandemic, when celebrities and tech gurus like Elon Musk adopted and even purchased the token.
Many believe that Dogecoin has no real use other than for blockchain payments, which almost all cryptocurrencies offer. The token has an unlimited supply, although there is a fixed reward of 10,000 Doge for each new block. One of Bitcoin’s biggest selling points is its limited 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 build a community and go viral. This is probably the main reason why the token has a market capitalization of over $59 billion and is the seventh largest cryptocurrency in the world. Celebrities like Musk and Mark Cuban have adopted the token and enabled Doge payments for their various businesses.
Having Musk and his more than 206 million X followers 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 theoretically make cross-border payments, the company Ripple in particular designed XRP for this use case. XRP can process transactions in three to five seconds and settle more than 1,500 transactions per second, making it ideal for commercial use. Additionally, Ripple, the company behind XRP, has 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.
Although 100 billion is a large number, it is still a fixed amount, making it better able to protect against inflation than Dogecoin. XRP could also be a candidate to become a spot exchange-traded fund (ETF), which would increase the liquidity and exposure of the token. Several companies have taken initial steps to begin the ETF process, and XRP recently began trading on Robin Hood.
XRP has also found itself in the spotlight in recent 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 industry, as the SEC and stakeholders argued over crypto regulatory jurisdiction.
A federal judge has already ruled in favor of Ripple, but the SEC appealed parts of the decision earlier this year. However, with the resignation of SEC Chairman Gary Gensler once President-elect Donald Trump takes office in January, the trial could end sooner than expected.
Which one to buy?
While I won’t deny Dogecoin’s ability to appreciate in a crypto bull 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 can’t eventually get them as well. I also think the lawsuit has weighed on the price of XRP in recent years, which should change soon.