Why Ethereum Might Be the Smarter Crypto Play Than XRP Right Now

XRP has been on an absolute tear lately—up 340% since the November 2024 elections, crushing Ethereum’s 22x smaller gains. But here’s the thing: past performance doesn’t mean future dominance. When you dig into the actual economics of these two tokens, the picture gets way more interesting.

The XRP Problem: Banks Don’t Actually Need It

Ripple’s pitch sounds solid: international banking is slow, expensive, and broken. We get it. The company built XRP to fix that—faster settlement, cheaper fees, all that good stuff. And yeah, major banks actually use Ripple’s technology.

But here’s the plot twist: most of them don’t actually use the XRP token itself.

They can tap into RippleNet and get all the efficiency gains while staying completely away from a volatile crypto. It’s like getting the benefits without the risk. On-Demand Liquidity (ODL) is the one place where XRP actually gets used as a bridge asset, but even that’s got an expiration date. Why? Because Ripple just bought Rail (a stablecoin platform) and is going all-in on stablecoins with RLUSD.

Think about it: if Ripple’s own stablecoin becomes the bridge asset instead of XRP, what’s the actual demand driver for the token? Exactly.

Ethereum’s Stablecoin Advantage Is Real

Here’s where Ethereum flips the script. While Ripple is trying to build stablecoins as a replacement for XRP, Ethereum is already the home of most major stablecoins. USDC, USDT, DAI—the lion’s share of all these transactions happen on Ethereum’s blockchain.

Every single one of those transactions requires gas fees paid in Ether. This creates constant demand pressure for ETH, and here’s the kicker: Ethereum actually burns a meaningful amount of Ether per transaction. That’s deflationary pressure.

Ripple has a burn mechanism too, but it’s so tiny—fractions per transaction—that it barely registers. Ethereum’s burn actually moves the supply needle.

The Math: Demand + Scarcity = Value

Stablecoins are projected to become a multitrillion-dollar market (Citi Group’s call). If that happens:

For XRP: Might get replaced by RLUSD in the exact use case it was built for.

For Ethereum: Every stablecoin transaction fuels demand for ETH and removes supply through burning. It’s a virtuous cycle.

Sure, there are complications—Layer-2 networks reduce gas fees, which could dampen burn rates. And new ETH minting for validators offsets some of the burn. But the core mechanic still holds: Ethereum benefits structurally from stablecoin explosion, while XRP’s economic case is getting shakier.

The Bottom Line

XRP’s 340% run is impressive on a spreadsheet. But when you look at the actual token economics and what’s happening with Ripple’s strategy, Ethereum’s long-term value proposition looks more bulletproof. XRP feels like a momentum play. Ethereum feels like you’re actually owning a piece of infrastructure that benefits from the biggest trend in crypto right now.

For serious crypto investors, that distinction matters.