Ripple Labs, the XRP (CRYPTO:XRP) token creator, has been fighting a lawsuit against the U.S. Securities and Exchange Commission (SEC) for the past year. It is a monumental lawsuit that could have far-reaching consequences on regulations regarding the cryptocurrency industry. The cryptocurrency could receive a massive boost if Ripple Labs comes out as the winner.
And then there is Bitcoin (CRYPTO:BTC), the world’s first and most popular cryptocurrency. It was the first of its kind to come along and introduce the disruptive blockchain technology that’s changing the face of how global financial markets work. The largest cryptocurrency in market capitalization has had its share of ups and downs. However, the cryptocurrency token is here to stay and will likely regain momentum based on historical trends.
The question in the Ripple vs. Bitcoin debate is which of the two is a better investment today?
Let’s take a look at the two giants in the cryptocurrency industry to help you make a more informed decision about which to choose.
The case for Ripple The U.S. SEC filed a lawsuit against Ripple Labs and two of its senior executives. It alleged that the defendants traded $US1.3 billion worth of their cryptocurrency tokens as a security without registering them. The SEC has classified XRP as a security because the cryptocurrency was used as a platform to facilitate payments for retailers. The sale resulted in Ripple Labs and its management earning a significant amount of money.
A sound case, but Ripple Labs does not classify XRP as a security. It also argues that the regulatory body had plenty of time to raise the issue instead of waiting for billions of XRP tokens to enter circulation in cryptocurrency exchanges worldwide.
If the SEC wins, it could result in a world of regulatory measures descending on the broader cryptocurrency industry. A win for Ripple Labs, which appears to be imminent, would relieve the cryptocurrency industry regarding much of the regulatory concerns it faces.
All the positive momentum in Ripple Labs’ favour paints a strong future for XRP and could provide its investors with substantial returns.
The case for Bitcoin Bitcoin came along as the first cryptocurrency. It has been the disruptive force that paved the way for the likes of XRP and thousands of other cryptocurrencies to follow. Naturally, it gets that first-mover advantage. It is a name that has become synonymous with cryptocurrencies and is considered a measure of the performance of the broader industry.
Being the oldest cryptocurrency, it has its set of advantages. It is a well-established entity in the industry, and it is the most mainstream among its peers. The launch of the Purpose Bitcoin ETF made it an asset you can gain exposure to through traditional stock markets. However, Bitcoin’s blockchain network is massive and energy-intensive. Environmental concerns have put a dent in its popularity, but it remains the top cryptocurrency in terms of market cap.
Bitcoin has had its ups and downs over the years. At writing, Bitcoin trades for US$42,270.80 per unit, roughly 40% down from its all-time highs. It might make for an excellent investment if you are bullish on its recovery to its all-time highs.
Foolish takeaway Carefully considering the pros and cons of XRP and BTC, I think that Bitcoin might be a reasonable play because of how things stand today. Bitcoin has already shown us how much potential it possesses for delivering stellar returns to its investors. The cryptocurrency has been around for a long time, boasts a wider adoption, and it has penetrated traditional financial markets. The first-mover advantage it possesses might make it a more attractive play today.
XRP may become a more dominant force in the cryptocurrency industry once its case with the SEC concludes. But it might take some time to get close to the levels Bitcoin has achieved. I don’t personally invest in crypto, but Bitcoin would be relatively more secure investment in my books compared to the XRP token.
The post Ripple vs. Bitcoin: Which Should You Choose? appeared first on The Motley Fool Canada.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool owns and recommends Bitcoin.