Better Buy in 2025: XRP or Bitcoin?
Wednesday, Dec 25, 2024 5:57 am ET
9min read As we approach 2025, investors are wondering which cryptocurrency will be the better buy: XRP or Bitcoin? Both have unique features and use cases, but let's dive into their historical performance, risk-adjusted returns, and other factors to help you make an informed decision.
Market Capitalization and Trading Volumes
Historically, Bitcoin has maintained a significantly higher market capitalization and trading volume than XRP. As of November 2, 2024, Bitcoin's market cap was around $540 billion, compared to XRP's $25 billion. Bitcoin's trading volume was approximately $30 billion, while XRP's was around $2 billion. However, XRP's lower market cap and trading volume may present an opportunity for higher growth potential.
Historical and Projected Returns on Investment
Based on the provided data, XRP-USD has underperformed BTC-USD in recent years. As of Nov 2, 2024, XRP-USD's YTD return was -16.60% compared to BTC-USD's 64.40%. The 1Y return for XRP-USD was -15.43% vs. BTC-USD's 98.87%. However, XRP-USD's 5Y return (Ann) was 11.98%, slightly higher than BTC-USD's 49.72%. For better insights, consider consulting a financial advisor or conducting further research.
Volatility and Risk-Adjusted Returns
In 2025, investors seeking a better buy between XRP and Bitcoin should consider their volatility and risk-adjusted returns. XRP, with a daily standard deviation of 51.90% and a maximum drawdown of -95.87%, exhibits higher volatility than Bitcoin, which has a daily standard deviation of 43.00% and a maximum drawdown of -93.07%. However, XRP's Sharpe ratio of -0.09 indicates lower risk-adjusted returns compared to Bitcoin's Sharpe ratio of 1.05. Additionally, XRP's Sortino ratio of 0.36 is lower than Bitcoin's 1.74, further emphasizing Bitcoin's superior risk-adjusted performance.
Correlation with Other Assets in a Portfolio
The choice between XRP and Bitcoin as a better buy depends on your investment goals and risk tolerance. Both have unique characteristics that make them attractive. XRP, with its focus on cross-border payments and lower volatility, offers a more stable option, while Bitcoin, with its decentralized nature and higher volatility, provides greater potential for growth. However, their correlation with other assets in a portfolio is crucial for risk-adjusted returns and diversification benefits. According to data from PortfoliosLab, XRP and Bitcoin have a moderate correlation of 0.67, suggesting they can provide some diversification benefits.
In conclusion, the better buy in 2025 between XRP and Bitcoin depends on your investment goals and risk tolerance. While both have unique advantages, Bitcoin's superior risk-adjusted performance and higher growth potential may make it the better choice for investors seeking higher returns. However, XRP's lower volatility and focus on cross-border payments may appeal to more risk-averse investors. Ultimately, the decision will depend on your individual investment goals and risk tolerance.
Comments
Friendly_Affect_1316
04/26
Wow!the Peak Seeker algorithm successfully identified both trough and apex inflection points in META equity's price action, while my execution latency resulted in material opportunity cost.
Sotarif
03/24
Netflix isn't just making shows—it's building a universe. $18 billion later, and we're all just passengers on this binge-worthy journey
SHIT_ON_MY_BALLS
03/24
$18B content spend: Netflix going all-in, folks.
Codyofthe212th
03/24
Netflix's live sports move? Pure genius. Diversifying content keeps subs hooked. Betting big on NFL was a slam dunk.
wodentx
03/24
Diverse lineup keeps subs hooked; retention's key win
Protect_your_2a
03/24
Doubling ad revenue? 🚀 Bullish on $NFLX growth prospects.
WoodKite
03/24
Netflix's live sports bet? Bold move, potential gold mine.
skychi
05/16
OMG!The VACHU stock was in an easy trading mode with Premium tools, and I made $223 from it!
Opening_AI
13 hour ago
Binance and crew are up in arms because Brazil wants to take away their crypto keys. They're like, "We'll just move to a better neighborhood!" But the lawyers are all, "You can't just take the keys and leave us with the mess." It's like when your friend borrows your car without asking—eventually, someone's gonna get mad. Time to share nicely or face the music.
Quetzacoal
13 hour ago
Holy!The BTC stock generated the signal, from which I have benefited significantly!
Elibroftw
05/15
Trump snubbing Microsoft at the Middle East bash could be a big deal. AI partnerships are shifting like sand dunes.
James1997lol
05/15
Tech stocks are partying, but fundamentals matter, folks
SuperRedHulk1
05/15
@James1997lol What about the fundamentals?
bobpasaelrato
05/15
DELL's RSI is screaming "bubble territory." History repeats itself, or can it defy gravity this time?
CALAND951
05/15
I'm holding $MSFT, but keeping a close eye
daynightcase
05/15
Apple's tariff headache might hit margins hard.
Brilliant_User_7673
05/15
$AAPL's tariff problem ain't going away. Price hikes might not fly if AI isn't the game-changer everyone hopes for.
InevitableSwan7
05/15
DELL's RSI is off the charts 🤯. Techies gotta chill. Earnings drop history says brace for impact.
lies_are_comforting
05/15
Anyone else think $MSFT is just riding the FOMO wave? Technicals look shaky, man.
discobr0
05/15
AVGO's RSI is screaming "bubble!" Watch for a pullback before reentering. Fundamentals need more oomph.
Phuffu
05/15
AVGO's RSI is through the roof. Chances of a pullback look high. Anyone else thinking of taking profits?
Zestyclose_Gap_100
05/15
@Phuffu Think AVGO's peaked yet?
goodpointbadpoint
05/15
@Phuffu Yep, pullback's likely.
QuantumQuicksilver
05/15
AAPL's tariff situation is a ticking time bomb. Premiums might scare off buyers. I'm holding but keeping a close watch.
twitgod69
05/15
@QuantumQuicksilver How long you planning to hold AAPL? Curious if you think the price premium will really scare off buyers.
Silver-Feeling6281
05/15
MSFT's absence at Trump's meet feels like a red flag. AI game's heating up, and they're on the sidelines? 🤔
serenitybybowie
05/15
BAC's overheated sentiment might lead to a cooldown. Not a bad time to reassess the bank sector's value.
BrianNice23
05/15
"The market's galloping like a wild horse, but don't get too attached—this ride's leash is short. FOMO's fueling the frenzy, but the drop's just a heartbeat away. Stay sharp, 'cause the party's about to end.
Holiday_Algae7381
05/15
@BrianNice23 What's your take on tech valuations?
SnowShoe86
05/15
MSFT's absence at Trump's meet makes me nervous. AI game is heating up, and they're cooling down. Time to hedge?
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.
