The crypto market is heating up again. With the fourth Bitcoin (BTC -1.84%) halve seven months in the rearview mirror and a crypto-friendly result in the 2024 electionsthe main pieces seem ready for another surge. As of November 22, Bitcoin had gained 27% this month, and Ethereum (ETH -4.62%) posted a richer gain of 36%.

But the biggest names aren’t always the best buys. THE XRP (XRP -15.09%) the token soared 136% in November. East XRP a better way to build wealth in the crypto market than Ethereum or Bitcoin?

Why Bitcoin and Ethereum are more valuable over time

Generally, Bitcoin and Ethereum should be more valuable than XRP in the long term.

• Bitcoin aims to act as a versatile system for storing monetary value.
• Ethereum was designed to power automated financial systems and other software applications, which form the foundation of decentralized finance (DeFi).
• XRP’s mission to provide fast, low-cost payments across international borders is still ambitious and legitimate, but it cannot compare to the broader visions of smart contracts and full-fledged digital currencies.

So I don’t expect XRP to definitely overtake Ethereum or Bitcoin. I suppose this could happen if another cryptocurrency (or entirely new financial technology) replaced Bitcoin as the primary “digital gold” or if one of the so-called Ethereum killers provided a smart contract platform objectively superior. This would be bad news for the former crypto kings, but not necessarily good news for XRP and its investors.

XRP’s evolving position in the market

That being said, XRP has plenty of room to grow before going up against Ethereum and Bitcoin. It is now the sixth largest cryptocurrency by total market value, far behind the summit giants. It would be particularly shocking to see XRP have a larger market cap than Bitcoin – but its value could multiply more than 20 times without raising this question, and I would have to assume that Bitcoin has not increased over the same period. :

Data collected from CoinMarketCap on November 22, 2024.

Bitcoin aims to replace physical gold as a financial value storage system. This represents a market of approximately $14 trillion today.

The global volume of cross-border payments is much larger than that, estimated at around $190 trillion per year. But the fees, exchange costs and service expenses associated with these massive money flows are much lower, at $193 billion in 2023.

Thus, XRP targets a smaller revenue-generating opportunity. And keep in mind that its payment service RippleNet is known for transferring money with minimal fees. Thus, the token’s actual revenue target will be much lower than the banking system’s current share of foreign money transfers.

XRP deserves your consideration alongside bigger coins

Now you know how the long-term value of XRP compares to Bitcoin and Ethereum, and I’ve discussed the limitations of this token’s target market. Bitcoin can clearly fill a role in your portfolio that XRP doesn’t even try to play, and the same can be said for Ethereum. A well-balanced cryptocurrency portfolio should have some exposure to the two biggest names in this sector.

I’m not saying you should sell your Bitcoin and bet on XRP today. Nonetheless, the XRP token appears undervalued and has plenty of room to grow over the next few years. The legal challenge filed by the U.S. Securities and Exchange Commission four years ago is expected to conclude in 2025.

Banks in money centers around the world are taking blockchain-based payment systems more seriously than ever, with XRP playing a leading role in this adoption trend. And the RippleNet service is getting busier: the number of daily XRP payments has tripled in six months.

I could go on talking about the positive trends in the Ripple space, from liquidity pools to central bank digital currenciesbut you get my point. This fairly large cryptocurrency is on the move.

So, in addition to the generally bullish mood in the crypto sector, XRP has several growth catalysts in play. Don’t forget Bitcoin and also keep Ethereum in mind, but you should also make room for another winning name. A modest amount of XRP tokens should serve your nest egg well in this bull market.