How Close Is XRP to Flipping Ethereum?

Ethereum has been the king of altcoins for many years now, but could it be dethroned? As XRP gains increased adoption, some say it could take the second spot in the crypto market. At the time of writing, Ethereum is trading around $2,956.66 USD, while XRP is at about  $1.87. Clearly, the former still holds a strong lead, but a shift wouldn’t be out of the question, especially if XRP adoption skyrockets and ETH faces regulatory and scaling issues. To be clear, XRP flipping ETH wouldn’t mean the price of the former will necessarily rise to new heights and overtake Ethereum’s. It would, however, require it to eclipse Ethereum’s market cap (you wouldn’t want to miss out on such a huge milestone, so be sure to check both the news and the fluctuating XRP price prediction to be the first to learn how things unfold).

But until we have the verdict, let’s dig into the journey of these two crypto assets so far, and see whether XRP has what it takes to surpass Ethereum.

Overview of XRP and Ethereum

Blockchain’s journey has been fascinating to say the least, and Ethereum and XRP Ledger are a testament to it. While both are decentralized, they are built for entirely different missions:

• Ethereum is the brainchild of Vitalik Buterin, and its purpose is to create a world where digital ownership, finance, and agreements don’t rely on middlemen, but run on code instead. At the same time, it serves as the cornerstone of NFT marketplaces, DeFi, and numerous dApps, all of which are powered by ETH.
• XRP Ledger focuses on just one thing: fast and low-cost cross-border payments. Created by Ripple Labs, XRPL has brought incredible opportunities for banks and financial institutions, eliminating delays and fees associated with traditional systems. XRP, its native token, is a bridge currency that ensures transactions are smooth and cheap.

XRP versus Ethereum: A look at the Historical Performance

Over the past five years, Ethereum and XRP have experienced significant price fluctuations due to regulatory news, market trends, and adoption cycles. While ETH entered 2020 below the $200 mark, it quickly revived during the DeFi boom, when it broke $1,000 by early 2021. But its comeback was stronger than anyone would have expected: in November 2021, it reached an all-time high of nearly $4,800, riding the wave of network upgrades, NFT growth, and institutional adoption.

XRP’s journey looked a bit different. While the cryptocurrency started 2020 at $0.20 and reached $1.80 in April 2021, marking a strong rally, the SEC lawsuit against Ripple unfortunately stifled its growth. Hence, during the time Ethereum continued to attract investment, XRP struggled to move at all.

While volatility is the companion of all crypto assets, it didn’t affect ETH and XRP to the same extent. The former moved in tandem with the growth of the technology and the ecosystem, but the price of the latter was very reactive to the regulatory news. And it’s enough to look at the market cap of the two assets to see which wins in terms of investor confidence, regulatory impact and adoption. Does this mean that XRP will be unable to compete with ETH in the future? Not necessarily.  The cryptocurrency market doesn’t quite have a reputation for being predictable, and trends can shift overnight, leaving everyone wondering, “What did I miss?”

Factors That Could Drive XRP to Overtake Ethereum

Ethereum has been here for years, so it’s quite hard to envision a future where another project could overtake it. So, one cannot help but wonder: “Does XRP truly make a serious challenge?”

Let’s see below.

Cross-Border Payments Versus Smart Contracts

Ethereum and XRP may be part of the same market, but the games they are playing are entirely different. While Ethereum is the foundation of smart contracts, XRP aims to make cross-border payments cheaper and faster. And while there’s no doubt that the two have massive potential, XRP might (surprisingly) have the upper hand in market size. Let’s explore some numbers to back up this statement. In 2023, the cross-border payments sector was valued at $190.1 trillion, and it’s projected to achieve $290.2 trillion by 2030. Note that we’re talking trillions here.

On the other hand, the smart contract market is much smaller, even if it is growing. By 2032, it is expected to hit $12.07 billion. If XRP continues to make waves in the payments landscape, its upside could be huge.

Regulation: A Blessing in Disguise For XRP?

Looking back, regulation seems to have been a curse for XRP, due to its long battle with the SEC.  However, Ripple has emerged as a winner, instilling confidence, and unlike Ethereum, which continues to face uncertainty regarding its classification, XRP strives to be compliant with global financial laws. This could offer it a massive advantage in terms of institutional adoption, as banks and governments will be more than happy to use a crypto with clear legal status. So, if Ripple continues to make progress here, regulation could actually give it a significant advantage.

Increased Adoption of Cross-Border Payment Solutions

Real-world adoption is a massive thing for XRP. Ripple has put a lot of effort into integrating XRP into TradFi, and it’s all paying off. In 2024, the crypto was integrated into U.S. banks for global payments, making transactions cheaper and faster, but it has also partnered with banks in Saudi Arabia, India, and other major markets. On top of that, Ripple is working on Central Bank Digital Currency projects, and if more central banks embrace its technology, it could further legitimize XRP, giving it a status very few cryptocurrencies have. Do you know what this means? XRP is no longer just a token.

Do Experts and Retail Investors Believe It’s Possible for XRP to Flip Ethereum?

The debate over the potential flippening has been a hot topic for a long time, and while some experts say it’s a long shot, others are bullish on XRP’s chances. Retail investors, on the other hand, are arguing about Ethereum and XRP, and as expected, the opinions are pretty split.  Some have a firm belief that XRP will flip Ethereum (at least for a short period), and they go as far as stating it could even overtake Bitcoin.  Those on the bearish side, however, say that XRP has failed to keep up with Ethereum, even if it’s one of the oldest projects in the industry. In short, whether XRP gets its moment of glory or Ethereum keeps a firm ground remains to be seen, as it hinges on many factors.

The Bottom Line

The scenario where XRP overtakes Ethereum isn’t impossible. But it will be tough, because Ethereum’s deep-rooted dominance in smart contracts, DeFi, and institutional adoption gives it an advantage. If a flippening happens, the reason would likely be a surge in XRP adoption, a major setback for Ethereum, or a mix of both. That being said, it’s important to remember that market cap rankings aren’t everything. Ultimately, both assets play crucial roles in the crypto space, and the success of one does not necessarily mean the failure of the other.

The post How Close Is XRP to Flipping Ethereum? appeared first on Entrepreneurship Life.