XRP remains a compelling long-term bet.

A $500 investment in the stock market probably isn’t enough to change your life. But if you bet on the right cryptocurrency at the right time, the results can be downright explosive.

For example, if you put that money into XRP (XRP +12.30%) 10 years ago (and held through the volatility), you would have $276,000 today. That’s a return of over 55,000%, which trounces the S&P 500’s gain of just 223% over the same time frame.

With a market cap of $140 billion, XRP is now huge. And that means it almost certainly won’t be able to repeat the incredible gains that it enjoyed in the past. That said, the digital asset is still a compelling pick for investors who want a blue chip cryptocurrency that still looks capable of market-beating returns over the long term. Let’s dig deeper.

The Trump rally seems to be over

The 2024 election victory of President Donald Trump has been seen as a significant catalyst for cryptocurrency industry growth. And in terms of policy, the new administration hasn’t disappointed.

In just a matter of months, the White House worked to reduce regulatory uncertainty through legislation like the GENIUS Act. It has also withdrawn several Biden-era lawsuits and created the Bitcoin Strategic Reserve, which adds a much-needed layer of legitimacy to the entire asset class.

Today’s Change

(12.30%) $0.28

Current Price

$2.54

XRP’s 12-month return of around 307% can be credited mainly to political optimism. But the real benefits of the policy changes may play out over the longer term as institutional investors like pension funds, insurance companies, and university endowments become more comfortable dipping their toes into the cryptocurrency opportunity.

Unlike retail investors, these types of organizations typically hold for the long term, unfazed by short-term volatility. Their participation could have a much-needed stabilizing effect on the market, leading to a positive feedback loop as cryptocurrency eventually loses its speculative stigma. But overt government support isn’t the only tailwind for the industry.

Trust in the dollar might be fading

While the Trump administration helped facilitate cryptocurrency adoption through policy, some of its actions could inadvertently boost the industry as investors lose confidence in the U.S. dollar because of erratic trade policy, rising national debt, and questions about central bank independence. These issues have already sent the dollar index down 8.2% year to date.

Cryptocurrency is an ideal way to diversify outside the dollar because it has historically offered better long-term returns than gold and foreign stocks, which often dramatically underperform U.S. markets. For example, the Japanese Nikkei 225 has only returned 180% since 1995. Yikes.

Image source: Getty Images.

Why pick XRP over the alternatives?

Unlike corporate stocks, cryptocurrencies don’t have intrinsic value based on revenue or earnings, which can make them difficult to compare with one another. However, over time, some clearly outperform because of factors like brand position, real-world utility, and development strategy.

XRP’s brand is built around its utility in cross-border payments, where it can serve as a bridge between different fiat currencies. While most cryptocurrencies can technically fill this role, XRP stands out because of its high transaction capacity (1,500 per second) and low fee of just 0.00001 XRP per transaction, which is less than a cent.

The platform’s development team, Ripple Labs, has also played a significant role in boosting the asset’s legitimacy and reach through partnerships with mainstream financial institutions and payment providers that are experimenting with its fintech solutions.

Ripple offers an enterprise payment network called RippleNet, designed to help companies transfer money around the world using XRP or more traditional methods. And this year, the developer took things a step further by applying for a U.S. banking charter, which will further boost its legitimacy and ability to serve clients without costly intermediaries. These compelling tailwinds make XRP look like a long-term winner.