If you were given $5,000 and told to bet it on just one cryptocurrency, which would you pick: the chain built and streamlined for the tastes of Wall Street, or the infinitely flexible one built by crypto’s original visionaries? That’s roughly what’s at stake when comparing XRP (XRP -4.71%) and Ethereum (ETH -7.93%) today. Their technology stacks, user bases, and value propositions couldn’t be more different, and yet they’re both valid candidates for a long-term hold.
But one of them looks like a clearer buy right now. Let’s analyze both and determine which is the better place to park your capital.
XRP is undeniably finding a strong product-market fit right now
There’s a lot of evidence that XRP is consistently succeeding in making fruitful investments in its core technology to meet the demands of its target users. For reference, its preferred users are institutional investors, who by definition have a lot of capital on hand to manage and allocate.
The newest piece of evidence in the chain’s favor is that the average daily active wallet addresses on the XRP Ledger (XRPL) jumped 142% quarter over quarter to 134,600 in the first quarter of 2025, hitting a two-year high. That volume indicates that more users are onboarding to the chain, and they wouldn’t be doing that unless they wanted to utilize it for making money transfers or managing their assets.
Elsewhere on the adoption front, Ripple, which issues XRP, keeps landing real-world deals that are set to increase utilization of the coin for real-world financial tasks. In May, the company launched a cross-border payment corridor in the United Arab Emirates with Zand Bank and the fintech firm Mamo, emplacing the coin at the heart of one of the world’s busiest remittance hubs.
Image source: Getty Images.
Meanwhile, more stablecoins are migrating onto the XRP Ledger, and an EVM-compatible sidechain is slated to be pushed to the mainnet via an upgrade in Q2 2025, creating a significant new resource for developing smart contracts on the chain.
If you’re not familiar with the concept of EVMs or sidechains, don’t fret. The takeaway here is that Ripple is opening the door for XRP’s ledger to have smart contract functionality by borrowing from the most common infrastructure solution for that role in the crypto sector, which happens to be native to Ethereum. There’s going to be a lot more developer talent ready to develop apps on the XRP Ledger as a result, and it might even steal them from Ethereum’s ecosystem.
Furthermore, institutional money is following the upgrades to the chain’s plumbing. Ripple’s latest markets report showed $37.7 million of net inflows to XRP investment products in Q1, which puts it within striking distance of the volume of inflows to Ethereum-based funds despite that coin’s much larger market cap.
Crucially, the XRP Ledger is baking know-your-customer (KYC) and anti-money-laundering (AML) controls into its protocol without juggling third-party widgets or smart contract wrappers in the way that projects on Ethereum are obligated to. For big institutional balance sheets, that’s a huge feature, especially as more assets start to migrate to storage and settlement on-chain.
Assuming the sidechain launches on time and new corridors keep opening, network usage could keep compounding, and its setup is very bullish at the moment.
Ethereum might be turning the bend, finally
The last 12 months have been hard for Ethereum, with drooping interest from developers and investors, as well as a price that fell by 29%.
Nonetheless, its fortunes look like they’re finally changing, which would make right now an especially appealing time to invest.
The most important ingredient in the turnaround is that Ethereum just completed its planned Pectra upgrade on May 7. The patch introduces new identity and security features, and other under-the-hood edits aimed at scaling up its capacity while both reducing gas (user) fees and cutting transaction times. In total Pectra promises a smoother user experience on the chain today, and a springboard for larger throughput leaps tomorrow.
Another pillar of its value proposition is that despite two years of dreary headlines predicting the chain’s downfall, Ethereum still commands a 55% share of all total value locked in decentralized finance (DeFi) applications. That network effect keeps the single biggest segment of cryptocurrency application developers anchored to the chain, which is an advantage to its ecosystem that could outweigh higher fees for users compared to competitors.
Yet Ethereum’s appeal to institutional investors isn’t very strong still. Compliance tooling is splintered across token standards and off-chain identity layers, creating extra diligence work for regulators and asset managers.
Therefore, the bull case here hinges on two possibilities. If Pectra plus the coming follow-on upgrades deliver seamless and fast applications with even lower fees, and if the ecosystem converges on standardized, regulator-friendly token formats, the coin will be worth a lot more in a couple of years than it is today.
Both of those things are plausible, but neither is a slam dunk.
The verdict
If you must choose only one home for $5,000 today, XRP looks like the stronger option by far.
Its traction in the real-world payment sector, compliance-first design, and surging on-chain activity point to capital inflows that could make it worth a lot more much faster than Ethereum.
With that said, Ethereum is still the foundational layer for most decentralized finance, and Pectra could rekindle multiyear growth. Don’t count it out, just recognize that its momentum isn’t as rapid.