For decades, international payments have been routed through the SWIFT network, which is a messaging system that connects thousands of banks. SWIFT transactions can take days, sometimes weeks, because of intermediary banks, currency conversions, and messaging delays. The main users, banks, need to carry liquidity buffers to cover the risk of those issues. This means that using SWIFT, which stands for Society for Worldwide Interbank Financial Telecommunication, comes with a capital burden for banks.

XRP (CRYPTO: XRP) is a cryptocurrency designed for nothing flashier than moving value from A to B almost instantly and for almost nothing in fees. Banks wrestling with faster-payments mandates and cross-border fee pressure now have a tool that settles transactions in the time it takes to blink, so long as they're willing to abandon SWIFT. Here's why some of those banks and other financial companies are starting to consider XRP as a core reserve they might keep for decades rather than merely as a cryptocurrency investment to hold on the balance sheet.

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It's a lot faster and cheaper than the status quo

On the XRP ledger (known as XRPL), a transfer finalizes in roughly three to five seconds, with typical network fees of less than 0.001 XRP, or about a tenth of a cent at recent prices. For the sake of comparison, consider that SWIFT's own progress report touts a "dramatic" improvement to a 24-hour average for cross-border settlement last year, down from 96 hours in 2019.

Why does that transaction time and cost gap matter to banks when it comes to choosing a technology to use?

If you're a bank, capital that's trapped in transit is capital that isn't earning a yield. Every hour shaved off transaction settlement frees up capital that can be redeployed, thereby enabling the bank to generate more earnings than it would otherwise. Thus, there's a strong financial incentive here for banks to switch, and little that keeps them tied to the legacy solution except for inertia.

Furthermore, XRP's fee structure is predictable. SWIFT's message charges, foreign exchange spreads, and flat fees can be on the order of $50 per transfer. Typically, those exchange fees are billed as a percentage of the transfer amount, with 1% being a common take, so costs add up quickly for players that need to transact frequently and in large sums. With XRP, costs stay microscopic regardless of notional transaction size, and there is no currency being exchanged, so there are no exchange fees at all.

That reliability underpins the token's appeal as a utility reserve rather than a speculative investment. Once adopted, if it's anything like SWIFT, banks will be loath to transition to something else unless the benefits of doing so are very compelling.

Compliance matters too

The speed of a solution alone has probably never sold a big bank's chief compliance officer on adopting a new technology. What moves the needle is control and traceability.

XRP's ledger natively bakes a slew of regulatory compliance features directly into the protocol. Asset issuers, including those with key assets like stablecoins, can freeze individual trust lines, enact a global freeze, or enable deposit authorization so an account only accepts funds it has vetted. These features let banks satisfy know-your-customer (KYC) and anti-money-laundering (AML) obligations without incorporating external smart contract code, which is a tremendous headache on many other chains, particularly Ethereum.

As a result of XRP's compliance features and potential to cut costs, real-world pilots of financial businesses and organizations trialing XRP are piling up. Bhutan's central bank began a central bank digital currency (CBDC) sandbox on XRP's tech three years ago, looking to extend financial inclusion across its mountainous villages. More recently, Dubai green-lit a property tokenization platform that records deeds on XRPL, targeting $16 billion in real estate. Each project requires the ledger to prove it can handle regulated assets at scale, which is progress that risk officers and bank executives watch far more closely than investors typically do.

If those trials mature into production systems, banks holding XRP as an operational reserve gain a second benefit of optionality. The same tokens that are useful for making large international payments can also pay ledger fees for tokenized bonds or be used for trading other tokenized financial instruments. That versatility hedges against the risk that today's fast payment rails become tomorrow's legacy drag in the way that SWIFT is.

Thus, the durability of XRP as an asset is starting to look more persuasive than ever.

XRP's price can be volatile, yet the direction of travel toward faster payments, programmable compliance, and institutional custody is hard to miss.

For investors, that means the thesis behind buying and holding XRP today hinges less on a meme-driven price spike and more on the quiet decisions banks make to incorporate it over the next decade. Ripple, the company that issues XRP, is highly motivated to ensure that banks keep adopting the coin for their back-end use.

If XRP becomes the solution for tokenized deposits, CBDCs, and cross-border wholesale flows, demand from institutions with no intention of selling could easily anchor the coin's long-term value. And so far, the evidence is that things are moving in that direction.

Should you invest $1,000 in XRP right now?

Before you buy stock in XRP, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Alex Carchidi has positions in Ethereum. The Motley Fool has positions in and recommends Ethereum and XRP. The Motley Fool has a disclosure policy.

Few investments age gracefully when the world around them speeds up. The same pressure applies in crypto. Builders, investors, and users do not wait politely for laggards to catch up; they migrate to speed, liquidity, and, most of all, excitement.

That reality now confronts Cardano (CRYPTO: ADA), which was once celebrated for its emphasis on peer-reviewed research to advance its underlying technology, as well as for its deliberate pace of technical progress. Three red flags, in particular, suggest that the project risks permanent middle-of-the-pack status unless something changes quickly. Let's check out each of these warning signs in detail.

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1. Rivals are racing ahead in every dimension

In the crypto world, developers are the lifeblood of a blockchain.

They build decentralized apps (dApps), protocols, and tools that generate utility, liquidity, and real-world adoption. A thriving developer ecosystem attracts users, capital, and other partners, creating a virtuous cycle that drives a chain's value and growth. Without them, even the most technically sound chain can remain a ghost town.

In terms of developer activity in Cardano's ecosystem, it doesn't hold up very well against its chief competitors, Ethereum and Solana. Per Cryptometheus, a cryptocurrency data provider, Solana had 499 active developers, and Cardano had just 175 developers pushing updates for the week, down 33% from three months ago.

Furthermore, developers flow toward concentrations of capital, and that capital is pooling elsewhere. Fidelity, a major asset manager, filed in March to list a Solana exchange-traded fund (ETF). Bloomberg now pegs the approval odds of that ETF at 90% for 2025, which would be an institutional seal of approval that no Cardano product enjoys.

Meanwhile, Solana's total value locked (TVL) on its chain was nearly $12 billion in January and currently rests at around $8.6 billion. Cardano's TVL is just $331.6 million, down from $680.8 million in early December 2024. That means there's less real money parked on its chain.

And when builders, money, and regulators all prefer the other options, it's a big problem.

2. New upgrades aren't getting used

Blockchains tend to have technical constraints. Sometimes, those constraints are troublesome enough for users that the main engineers of the chain create big new modules or other solutions in an attempt to prevent the flight of disaffected investors, users, or ecosystem developers. The success or failure of those solutions is, thus, often a major factor in determining whether to invest in the chain's native token.

And in Cardano's case, the record with successfully developing workarounds to the chain's issues isn't great, at least not in recent times.

Cardano's Layer-2 (L2) system, Hydra, dazzled testers with a 1 million transactions-per-second (TPS) demo last December, implicitly promising to solve the issue of lethargic transaction times during periods of peak load. L2s like Hydra are designed to handle transactions off the main blockchain, reducing congestion and perhaps also fees while maintaining security and interoperability. But they only matter if users adopt them and volume grows. Otherwise, they're tech demos, not adoption drivers.

Five months after launch, no major exchange, payment processor, or other project has committed to using Hydra beyond a pilot.

Another solution, called Midnight, is a side chain, which means it's a parallel network intended for specialized features such as privacy, among others. Side chains can extend a blockchain's functionality by providing specialized services that don't burden the main chain. Midnight aims to attract institutional users who want confidential holding of assets on the chain, but so far, no major financial players have signed on, and no real user base exists.

These technical marvels might eventually matter. But until developers, institutions, or users adopt them, they remain tantalizing but empty promises. And that's a big warning sign that Cardano is failing to match its development of capabilities to the features that are actually in demand.

3. Cardano's mindshare is eroding, not expanding

Crypto is a popularity contest masquerading as a set of technologies.

On June 4, Cardano counted around 23,273 daily active addresses, whereas Solana cleared nearly 5 million in the same day. That gap widens whenever meme coin mania or non-fungible token (NFT) drops spark traffic spikes. Those are segments where Cardano barely registers, as its ecosystem is very sparse in both areas.

Social chatter mirrors the numbers. Per data from Santiment, a crypto data aggregator, Cardano ranks far below Ethereum and Solana in terms of social media post volume, hinting that investor excitement has simply remained elsewhere. If users, developers, and institutions are not talking about Cardano now, why would they flock to it later?

In other words, Cardano's investment thesis -- that academic rigor in the tech development process will eventually lead to late-bloomer dominance -- faces mounting counter-evidence. Unless Hydra suddenly wins real traffic or Midnight lands marquee clients, the token's upside may remain capped while the opportunity cost mounts. And there's just not much evidence to suggest that's happening, nor is there any reason to believe it will soon.

Should you invest $1,000 in Cardano right now?

Before you buy stock in Cardano, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cardano wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

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Alex Carchidi has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Ethereum and Solana. The Motley Fool has a disclosure policy.

XRP (CRYPTO: XRP) is about to experience an interesting tug of war over its supply. On one side are the predictable monthly coin supply releases from escrow by XRP's issuer, a company called Ripple. On the other side are the world's first XRP treasury companies, which are start-ups whose sole purpose is to stockpile the coin and sit on it to capture its price appreciation over time.

That second force is small today. But the very fact it now exists when it didn't before creates incremental, structural demand for a coin whose floating supply is otherwise set to expand. If you can handle a three-year holding window and an investment as small as $1,000, the odds are thus very favorable that demand will win out in your favor if you buy the coin. Let's explore why.

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Meet the new XRP treasurers

A crypto treasury company is a publicly traded business that raises capital, buys a digital asset like XRP, and thereby offers its shareholders levered exposure to the underlying asset's price. This approach was first used by Strategy with Bitcoin, and now the same model is being attempted by a few enterprising companies with XRP.

In late May, the solar power and storage business VivoPower pivoted to become the world's first XRP-focused treasury company, closing a $121 million private placement-funding round and then in early June specifically allocating $100 million to purchase XRP in an over-the-counter (OTC) deal. And it isn't alone in picking XRP as its treasury asset, at least not any more. Within 24 hours of VivoPower's announcement, two other small companies, Ault Capital Group and an Asia-based logistics holding business, disclosed plans to buy XRP as a strategic reserve asset.

Why bother with holding coins when there are other ways to make money that don't rely on the vagaries of the market to generate a return?

Although it's yet to be proven successful, except in the case of Strategy, generally crypto treasury companies argue they can outperform just holding their underlying assets directly by issuing equity or convertible debt, buying coins, and capturing any upside on behalf of shareholders. Those shareholders are effectively making a leveraged bet on the crypto by buying the company's stock, so it's true that their returns could be higher than just holding the coins directly.

Here's the math to know

How much impact will these new treasury companies have on XRP's supply relative to what's being released from escrow each month? If the answer is "close to zero," then the coin's critics can retain one of their arguments against buying it. On the other hand, if the treasurers are taking a large amount of supply off the table, it would be another argument in favor of buying and holding the coin.

Ripple still controls about 36.5 billion XRP in escrow and, by design, unlocks about 1 billion tokens on the first day of each month. Historically, roughly 800 million of that haul are relocked, leaving a net 200 million XRP that can hit the market and boost supply and depress prices. So there's an inflationary element of XRP that is relatively minor in the big scheme of things.

Compare that with VivoPower's initial $100 million purchasing goal for the asset. At today's XRP price of about $2.25, it can buy roughly 44 million XRP. In other words, a single new treasury entrant can sop up roughly 20% of a typical month's net supply increase. Layer in similar moves telegraphed by other aspiring crypto treasury companies, and supply can start to tighten rather quickly, at least for as long as there's a steady drumbeat of new entrants making big purchases.

Critics counter that treasury companies are leveraged, thinly capitalized, and prone to dumping if XRP's price plunges, which is a fair point. It's also the case that Ripple could decide to sell more of each month's escrow if prices surge.

Nonetheless, the key is that demand pressure from buyers now has a persistent, deep-pocketed corporate source instead of relying solely on retail traders and banks. And that's bullish.

The setup looks favorable here

Assuming the XRP treasury club grows, three tailwinds could reinforce the thesis for buying $1,000 of the coin and holding it for at least three years.

First, the approval of a U.S. exchange-traded fund (ETF) application is widely expected sometime in 2025. An approval would ignite institutional demand the way Bitcoin ETFs did. It's not guaranteed, but it's no secret that the new administration's leaders are very friendly toward crypto.

Second, the supply unlock schedule itself is finite and not very scary at all. If the unlocking pace persists as it has, Ripple's remaining stash of XRP will eventually run dry. The monthly supply drip could then end entirely, leaving crypto treasurers, remittance banks, and everyone else to fight over a fixed supply. That would drive prices up.

Finally, competition among treasurers is now accelerating. Corporate executives hunting for their own version of Strategy's moment of popularity may decide XRP's utility for making payments are safer than an all-Bitcoin bet.

Of course, none of this insulates investors from volatility. That's why a $1,000 starting stake is worthwhile; it keeps your exposure modest while still letting you participate in the upside if demand outruns new supply.

Patience is the key here. Give the tug-of-war three years to play out, and the coin's price will likely be a lot higher than it is right now.

Should you invest $1,000 in XRP right now?

Before you buy stock in XRP, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and XRP. The Motley Fool has a disclosure policy.

Strategy (NASDAQ: MSTR) founder and Chief Executive Officer Michael Saylor is one of the most vocal of the Bitcoin (CRYPTO: BTC) bulls out there, and in recent days, he made yet another series of incredibly optimistic predictions about the coin's growth during the coming decades. Saylor says he expects the price of Bitcoin to rise at a 30% annual rate during the next 20 years, bringing its price into the ballpark of $13 million per coin.

For reference, its price is currently about $104,000, so Saylor's projection appears to be, at least on its face, extraordinarily ambitious, bordering on fantastical, or perhaps even what some would describe as delusional.

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Could he be right, or is this just another instance of another celebrity portfolio manager making lofty predictions in the course of "talking his book" to attract fresh capital for his most important investment?

The math is actually pretty favorable here

During the past 10 years, the price of Bitcoin rose by 43,820%. That puts its compound annual growth rate (CAGR) at 84%; during the past five years, its CAGR was 62%. Therefore, the back-of-the-napkin math for Saylor's predicted growth rate looks to be on the conservative side relative to the coin's historical performance.

Let's emphasize that point: Saylor's forecast for Bitcoin is based on a scenario in which it would consistently perform significantly worse than it has historically. But will this growth actually happen?

If it does, it certainly won't occur such that the coin's price marches upward each year in an orderly fashion. Multiple crashes of as much as 80% have already happened in Bitcoin's history, and similar plunges will probably happen again. Notably, the asset has recovered from all of those plunges so far and gone on to reach higher highs afterward. It's more probable than not that it will repeat those patterns.

In the current era, there are also a handful of drivers for Bitcoin's price that make it an attractive asset to hold even if it isn't capable of growing by as much as Saylor is banking on. Governments, institutional investors, and major corporations are all evaluating whether to hold it on their balance sheets, or are already acquiring it. Spot Bitcoin exchange-traded funds (ETFs) are giving investors easier access to the asset. And that's before even getting into the long-term drivers of its price performance, like its halving schedule and the scarcity that's baked into the coin's protocol.

So all of those trends will contribute upward pressure on the price of the coin during the next 10 to 20 years, as well as providing boosts in the shorter term as the commanders of large volumes of capital implement their Bitcoin strategies.

Even Saylor is advising you not to bet the farm

All of this is to say that Saylor could well be right about Bitcoin's long-term trajectory. There isn't any obvious barrier that would prevent the asset from compounding at the pace his forecast calls for.

Nonetheless, he explicitly warns against quitting your day job in hopes that the coin's price appreciation will carry the day for your personal finances. Nor is it advisable to sell your house to buy Bitcoin, nor to go into debt for the sake of accumulating it at a faster pace. The implications of a bright future for Bitcoin are no excuse to sacrifice the fundamentals of personal finance or your portfolio's diversification.

However, if Saylor's bullishness catches your imagination (as perhaps it should) what might make sense is to bump up the size of the allocation to Bitcoin in your portfolio. For conservative investors who might need their funds within the next five years, an allocation of 1% is reasonable, but for those with longer time frames, 5% or more could be a good idea. Just remember, you will only get the benefit of its price compounding over time if you keep your coins rather than sell them.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

There's one new paradigm in play that might make Cardano (CRYPTO: ADA) a better cryptocurrency to buy than Solana (CRYPTO: SOL). It doesn't have much to do with the technology underpinning either chain, but it is something that investors should probably know about today rather than when it might start making a price impact, which could take a few years.

Let's analyze what's going on and determine whether it makes Cardano worth considering, or whether it will continue lagging behind.

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The pace of ecosystem development matters

One of the most important factors supporting an investment thesis for buying a coin is whether there is a lot of activity on its chain. When projects on a chain are appealing to users because they offer an important decentralized finance (DeFi) service or other valuable capability, it attracts capital, boosting the price of the native token in the process. At the same time, if there's no compelling reason to park capital on a chain, money tends to flow elsewhere to find a return via investment, or to be used to pay for utility of some kind.

For investors, understanding the level of activity on a chain is not enough to make a sound decision. Instead, getting a sense of how much activity might increase in the future is key, as it's future usage that would drive prices up for those who invest today. There's no surefire way of determining whether a chain will be more in use in the future than it is today, but if there are a lot of interesting or valuable projects in development in the chain's ecosystem, it's a vote in favor of there being future demand.

Cardano is significantly smaller than Solana, with a market cap of $23.6 billion compared to the other coin's market cap of $74.3 billion. Therefore, with all else being equal, one would expect that the volume of ongoing software development for the projects hosted on each coin's ecosystem would be proportional to the chain's size, suggesting that Solana would have roughly 3 times as much development activity as Cardano.

It's difficult to measure how much software development activity is going on, but there are a few composite metrics that can approximately track how many times developers make substantive additions or changes to a chain's projects. One such composite metric, created by the crypto data provider Santiment, shows that Solana experienced around 464,000 ecosystem development events in the last 12 months, whereas Cardano experienced 389,900 events. So Cardano is seeing a huge amount of developer activity in its ecosystem for its size, and it isn't just a blip.

There's more than one factor that's relevant here

Experiencing more developer activity on its chain relative to Solana is not a slam dunk as far as making Cardano worth buying.

Cardano has a couple of substantial disadvantages that still make it a less appealing investment than Solana. First, it's more expensive and slower to transact on. Making a swap on Solana takes about a second and costs a fraction of a penny, whereas the same action on Cardano takes a few seconds at best and costs roughly $0.20 on average. That incentivizes more developers to develop applications on Solana over the long term.

Second, Cardano's ecosystem is nowhere near as diverse as Solana's, nor is it as vibrant today. It's nearly completely missing out on critical growth segments like artificial intelligence, as well as less-serious but still capital-attractive segments like meme coins. Other important categories, like stablecoins on the chain, are incredibly small for Cardano's size compared to the equivalent assets on Solana. So it has fewer opportunities for capital to flow in, and a weaker set of tools to accommodate users or investors interested in large transaction sizes.

Thus, while it's undeniably bullish for the chain to have a lot of development activity relative to a much larger chain, constituting a moderate-strength reason to consider making an investment, it's more than offset by the mediocre health of its ecosystem today. There isn't a strong reason to buy it over Solana.

It's possible that might change over the coming years, especially if its activity ramps up even more. But investors should be aware that such activity is only an investable factor if it's being directed toward producing real projects of value. And so far, Cardano simply isn't the home for the projects cryptocurrency investors are finding to be valuable today.

Should you invest $1,000 in Cardano right now?

Before you buy stock in Cardano, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Cardano wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Alex Carchidi has positions in Solana. The Motley Fool has positions in and recommends Cardano and Solana. The Motley Fool has a disclosure policy.

With so many different forces affecting its value at all times, it's remarkable that Bitcoin's (CRYPTO: BTC) price isn't even more volatile. So when there's significant purchasing action by a large holder that claims to want to hold on to its hoard of the coin forever, like there has been over the last couple of weeks, it's worth paying attention to.

After all, high-profile buying could be interpreted as a tailwind for higher prices. Or it could be viewed as a risk, since it might precede later news of the same actor ditching its position for greener pastures.

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With those dynamics in mind, let's break down who's buying it right now and why it could be an important factor in the coin's performance over the coming years.

Is it worth following this whale's move?

Strategy (NASDAQ: MSTR), which was originally a software business known as MicroStrategy but now claims to be a Bitcoin treasury, just purchased $555.8 million of Bitcoin in the week of April 14 through April 20, bolstering its smaller purchase of $285.5 million during the week ending on April 14.

It now has about $36.5 billion of the asset, which it procured using funds from a combination of borrowing and stock issuance, for an average price of $67,766 per token. These sizable purchases come on the heels of an even larger one executed at the end of March, which was worth $1.9 billion.

Given that Strategy has been loath to sell its Bitcoin so far, and that it might not ever do so unless forced to, some investors could interpret its ongoing confidence in the coin as a reason to buy it. After all, it controls around 2.5% of all the crypto that's currently in circulation, which is actually a very large proportion for an asset that's highly distributed and decentralized in nature.

With that much supply taken off the market, it will increase the competition among buyers for the remaining portion that's still for sale, which will drive prices up over the medium and long terms. Especially when paired with Bitcoin's other scarcity-generating mechanics, like its increasing mining difficulty over time, this kind of supply control can make it far more expensive for future buyers to secure a position of their own, significantly rewarding those who got in earlier, like Strategy.

At the same time, investors may also be interested in buying more Bitcoin because of the publicity that Strategy's purchases tend to bring. There's something compelling in the narrative of having a major evangelist for an asset that's proudly buying it at practically any price.

What's more, having a powerful advocate for the strategy of simply buying and holding Bitcoin is something that holders can benefit from, since it encourages the investor behavior that drives the price up over time.

Be aware that this is a risk

There is a bit of a possible downside to Strategy's purchasing activity. The company uses issuance of debt and equity to fund its purchases, as mentioned previously. That means if the price of Bitcoin drops enough, it could be forced into liquidation of its assets to make its creditors whole.

In other words, it could be forced into selling large volumes of its crypto, thereby potentially creating a downward spiral in the coin's price.

That outcome might not happen. Still, if Strategy continue to procure more and more of Bitcoin's total supply, the risk will increase, so it's important to recognize. There is no reason to hold off on buying the coin, but it is worth keeping an eye on, because a forced-selling cascade could actually be a good buying opportunity if it ever happens, assuming you can stomach buying the dip.

Overall, for now, Strategy's repeated public commitments to never selling any Bitcoin and its repeated purchasing of even more are a minor to moderately strong bullish tailwind. But, as a matter of principle, a big investor loading up on an asset cannot be a part of the investment thesis for that asset or a significant reason for buying it; that's simply bad investing form to try to borrow someone else's conviction to make a decision for yourself, and it never works in the long run anyway.

So buy Bitcoin if you're willing to hold it, but don't feel any pressure to copy what Strategy does.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Alex Carchidi has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.

XRP (CRYPTO: XRP) is quite ambitious for a cryptocurrency, aiming to be a cost-cutting tool for financial institutions making money transfers. Its next act might be even more ambitious than that.

It's already making strides to capture upside from one of the largest financial trends of the next 10 years or so. If it does what it is setting out to do, the result could be trillions more in value stored on its chain, with significant benefits for the coin's holders. But can it hit its target?

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This key trend could be the coin's biggest tailwind yet

According to a report published on April 7 by Ripple, the company that issues XRP, and Boston Consulting Group, there's an opportunity in the cryptocurrency sector that will be worth around $19 trillion by 2033.

The goal is to tokenize real world assets (RWAs) onto blockchains. We'll get to what that means in a moment. For now, just recognize that in 2025, there's only an estimated $600 billion of those assets that are tokenized, so a tremendous amount of growth could be on the way.

In short, an asset is tokenized if it's traceable and tradeable on a blockchain like XRP's. Tokenizing an asset is thus the process of linking the asset's ownership and metadata to a specific crypto token.

As for the "real-world assets" part, anything -- commodities, real estate, stocks, cars, and futures contracts, for example -- fits the bill and can be tokenized in theory. So, if someone's house was tokenized, they would be able to sell it or transfer it by making a transaction on the blockchain.

But why are Ripple and Boston Consulting Group so convinced that tokenizing real-world assets is going to result in such a vast amount of those assets living on blockchains instead of as they have been for all of history so far? In a word: convenience. Asset managers using blockchains to track and trade their assets can potentially do so with lower costs, faster speeds, less red tape, and fewer intermediaries compared to how they were doing it before.

So how does XRP fit into the picture? It's already a platform that asset managers and institutional investors are using to hold their tokenized RWAs. More than $1 trillion worth of assets have changed hands on the chain already. And, since it's already offering on-chain trading of crucial RWAs for banks and financial institutions, like U.S. Treasuries, it's a logical place for other asset managers to do business in the future.

Under a best-case scenario, most of the assets that get tokenized over the coming years will be held on XRP's ledger, bringing a vast amount of value to the chain. It will also create demand for XRP itself, as some of the coin is needed to process all transactions.

And because there's a network effect wherein having more volume of assets being traded results in better price settlement for asset traders, it could experience a flywheel effect -- with its early lead just getting larger and larger because competitors won't be able to offer similar efficiency to their users.

Success is possible, but far from guaranteed

Today, XRP is well positioned to attract assets to its chain via tokenization. Nonetheless, this trend is fairly new, and the competitive landscape is far from settled.

XRP is a leader in the RWA tokenization sector so far, but it isn't necessarily the top dog, because specialist players can offer new features to asset managers more rapidly. Likewise, XRP is only starting to get the social proof it needs in the form of buy-in from major financial institutions. Those same users could very easily develop solutions of their own and cut it out of the loop if they detect that the upside from doing so would outweigh the risks of making something new.

What's more, the connection between assets held on its chain and the value of the coin is not as strong as holders might wish, which somewhat limits the upside from hosting tokenized assets. It's undeniable that chains with more assets tend to have main coins that are higher in value.

But in the case of assets like real estate, nobody is about to confuse tracking an asset's value on a ledger with the ledger actually owning the asset and having full control over how its value is used or otherwise distributed.

So even if XRP becomes the home of trillions in RWAs on its chain, don't expect the coin's price to be hundreds of times higher than it is today.

On that note, there is nothing inherently blocking XRP from gaining in value from here as a result of increasing confidence in its asset tokenization platform. As long as it continues to offer the features that its target users need, this trend is a big bullish driver.

Should you invest $1,000 in XRP right now?

Before you buy stock in XRP, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.

In the cryptocurrency world, determining an asset's value is usually fairly difficult. But there is one specific type of cryptoasset that's comprehensively understood. An asset of that type shines a bullish light on the XRP (CRYPTO: XRP) cryptocurrency over the long term.

It isn't something that you'd be interested in buying for a gain, but you might be able to see yourself holding it anyway. Let's take a beat to learn about this helpful asset and why it's so important to the XRP coin's future prospects.

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This asset is in active use for its intended purpose

The Ripple group launched a stablecoin, Ripple USD (CRYPTO: RLUSD), last December. This coin is redeemable for $1 at any time, and it's backed by cash reserves to ensure that remains the case even during market or monetary disruption.

In total, the market cap of the stablecoin is $293.6 million, which is equivalent to the number of dollars stored on the chain in this particular financial instrument. That isn't a very large value in comparison to XRP's market cap of $107.3 billion, but it's important to note that Ripple, the company that issues XRP, can also choose to set aside some of its cash holdings to issue more of its stablecoin as well. So if there's an increasing amount of demand from potential users for stablecoins, the quantity of Ripple USD can be adjusted upward by issuing more.

As of noon on April 9, the 24-hour trading volume of that stablecoin was more than $81.3 million, which indicates a significant portion of the total value turned over during the prior day rather than merely being held and not actually used for any purpose. This means that holders of stablecoins on XRP's blockchain are actively using their holdings to execute transfers and make payments, just as intended. It also suggests that as new users are onboarded to the chain, especially financial institutions, Ripple will probably need to issue more of its stablecoin so that they have access to enough supply of an instrument in which to store their cash assets.

When Ripple does that, and offers its stablecoin to those institutions, the effect is that their fiat currency flows into XRP's chain, and is stored there. That tends to somewhat increase the price of XRP, as XRP is the asset that represents the totality of its chain, and it's also the asset that's necessary to have on hand to perform any action there. Therefore, whenever the stablecoin's market cap rises, it's a surefire sign to investors that Ripple is making accommodations for more users, and for more value to be stored on XRP's network.

And that's exactly what has been happening since the stablecoin's launch late in 2024, when its market cap was just $53.1 million. The new issuance shows that XRP's chain is enjoying wider adoption, which is why its future is likely bright.

Be aware that there are nuances here

Stablecoins aren't the only determinant of XRP's future. It's entirely possible for the coin's value to decline even as more money flows into Ripple USD. Remember, there's a pretty big gap between the coin's market cap and the market cap of its stablecoin, so there are a lot of external phenomena that could outweigh the impacts of big investors loading their cash assets onto the chain.

Furthermore, the policies surrounding stablecoins are still shaping up worldwide. It's likely that Ripple's relationship with regulators in the U.S. will enable it to stay on the right side of any new regulations that they implement over the coming quarters. But it probably doesn't have the same access in every other country that might host investors interested in holding assets on its chain. And that means there could be a disconnect between the promising-looking adoption curve of the chain today and what actually occurs as capital is either allocated to it or forbidden from allocating to it in the future.

But what should investors do with all of this information? Take it as a sign that XRP's feature set is appealing enough to its target demographic that certain core functionalities are getting scaled up to match demand.

If the trend continues, and it probably will, the XRP coin's price has a very good chance of rising over the long term.

Should you invest $1,000 in XRP right now?

Before you buy stock in XRP, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and XRP wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $496,779!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $659,306!*

Now, it’s worth noting Stock Advisor’s total average return is 787% — a market-crushing outperformance compared to 152% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.

With the market teetering on the edge of disaster due to concerns about tariffs and an economy that might be trending toward recession or potentially even already in a state of recession, now is a frightening time to be thinking about buying anything, especially a cryptocurrency like Bitcoin (CRYPTO: BTC).

There's a significant chance that every dollar invested into the market right now might be worth a bit less for quite some time. And, especially if there's an economic downturn that's sharper than anticipated, investors might find themselves short on cash to cover expenses if they over-commit to any single investment.

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Nonetheless, I'm still willing to buy Bitcoin hand over fist right now. I don't expect that to change, even if there's a bear market or if the economic headwinds grow fiercer than they already are. I feel good about my strategy here, so let me explain why it will probably work.

Loading up right now is a smart move for the long term

As you've probably heard, the whole point of Bitcoin is that it's an asset that nobody can issue more of, in contrast to a fiat currency. You've probably also heard that Bitcoin gets more difficult to mine over time, meaning that its supply will grow very slowly in the future. That implies a pair of things which make it an easy asset to keep buying no matter the economic conditions.

First, the scarcity mechanism of Bitcoin means there's a big incentive to buy it today rather than next year. In the future, it will be harder to produce, so when you go to buy it, you will be competing over a smaller quantity of new coins coming on the market. If there's a major recession today, it won't change anything about these basic factors, although it may push the price lower for the near future. But if you're investing with a long time horizon, the price on any specific day or even in any given quarter does not matter so much as the probability that the price will be considerably higher when you plan on selling years in the future.

And there's nothing about a recession that is going to make Bitcoin easier to produce, regardless of whether it's caused by tariffs or war or mismanagement or anything else. Remember, Bitcoin mining operations are spread around the world, so even if one country is experiencing dysfunction, miners elsewhere will still be able to keep the chain alive -- and if there's a disruption to miners, it will only slow the supply growth even more.

Second, much of the concern surrounding risk assets right now is linked to the onset of new tariffs in the U.S. Bitcoin isn't a good that's imported, and it can't be created via fiat. It isn't a medium of exchange for trade payments to any significant degree. Tariffs on mining hardware will simply cause mining to be done elsewhere, so there is no threat to the network itself.

So there are no direct risks to its value either in the near term or the long term. Therefore, as long as the coin has a handful of evangelists who are willing to buy it at any price, as I am, there will continue to be a persistent level of demand, which, when considering its supply dynamics, probably will slowly drive up prices over the long run.

Knowing the points above, and knowing that my time horizon for Bitcoin is to hold it for 20 or 30 years, there simply is not much of a reason to stop my regularly scheduled purchases. Bitcoin isn't going to get any easier to make, and in the big scheme of things, major holders are going to keep accumulating it to take supply off the market. The price today is a distraction.

Altcoin investments are on pause, not cancelled

As bullish as I may be on Bitcoin, the same is not true of altcoins at the moment, including those that I've held dear like Solana. There's no need to rush to sell, and there's no need to stop investing in them altogether, but more caution is now warranted compared to just a few weeks ago.

In short, the largest altcoins in the cryptocurrency sector are not necessarily very insulated from economic downturns at all. It's a no-brainer that they're riskier than Bitcoin because they're smaller and less established overall. But it's in times of turbulence that additional risk exposure can cause real problems for investors, and potentially problems that won't blow over once economic conditions improve.

It isn't that the core investment theses of the top altcoins are suddenly invalid, or that I'm selling them as a result of economic instability or tariffs. It's that their recovery is not at all guaranteed because many of them rely on the quality of the (typically highly risky) projects their blockchain ecosystems to continue to attract new capital to invest.

When investment dollars allocated to high-risk plays start to run short due to investors losing their nerve in perilous times, those ecosystems start to shrink. For them to recover, new projects, most likely in newly emerging growth segments, need to launch and find traction -- and that's something that is a lot harder to do in a shaky economic environment.

I'm still a buyer of certain altcoins these days, and you could be too. But when it comes to picking between altcoins and Bitcoin, for now, it makes more sense to lean toward the somewhat safer and longer-term play, as a lot needs to go right for the riskier options to deliver, and the environment might not be right for that to happen for a while.

Should you invest $1,000 in Bitcoin right now?

Before you buy stock in Bitcoin, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bitcoin wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $578,035!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of April 5, 2025

Alex Carchidi has positions in Bitcoin and Solana. The Motley Fool has positions in and recommends Bitcoin and Solana. The Motley Fool has a disclosure policy.