Bitcoin (CRYPTO: BTC) and XRP (CRYPTO: XRP), two prominent cryptocurrencies, may seem like direct competitors, but their adoption and development vary significantly. As investors consider allocating a finite amount of money, understanding which cryptocurrency to invest in is crucial.
A key differentiator between the two lies in their respective blockchain capabilities. The blockchain that hosts Bitcoin can track real-world assets (RWAs) but lacks inherent efficiency compared to its counterpart on XRP’s chain. Bitcoin’s transactions often take more than an hour to clear and cost a minimum of $0.37, whereas XRP’s transactions are completed within seconds at a fraction of a penny.
This disparity is set to become even more pronounced with the upcoming upgrade on March 22, which will grant XRP’s chain automated market maker (AMM) functionality. This feature enhances transaction efficiency for users, including those trading RWAs, and can lead to significant price disparities in favor of buyers and sellers. Financial institutions stand to benefit from these efficiencies, making them more likely to adopt XRP’s chain.
In contrast, Bitcoin lacks native AMM support on its main blockchain, necessitating additional steps for investors who wish to trade RWAs with the help of an AMM. This process is complex and not yet streamlined, potentially deterring many interested investors.
While both cryptocurrencies are still worth investing in, XRP appears more attractive due to its growing adoption by financial institutions and upcoming upgrade. Bitcoin, on the other hand, may not benefit significantly from its functionality unless it adapts and surpasses XRP’s advancements. Therefore, for most investors, Bitcoin is a safer choice but offers less potential growth compared to XRP.
Source: https://www.nasdaq.com/articles/1-new-factor-could-make-xrp-better-buy-bitcoin-right-now