XRP’s recent rise above $3 has been cause for celebration for the XRP community, affectionately known as the XRP Army.
As CriptoNoticias reported yesterday, social networks have been filled with jubilant messages, triumphant memes and a palpable feeling of victory.
It is not for less. These are prices that have not been seen for 7 years.
However, before we get carried away with collective euphoria, a more critical and thoughtful assessment of the true value of XRP is essential. Especially, it is useful to compare it with a strong currency such as bitcoin (BTC) and not against a currency in constant depreciation, such as the dollar.
When we measure the value of XRP in BTC, the recent rise looks more like a small fluctuation than a true victory.
Based on the chart below, XRP has shown a relatively modest increase which doesn’t seem like a big deal.
And why does this happen? First of all, it is worth clarifying that this is something that happens with many altcoins. Although its price in fiat money increases, its price in BTC tends to decrease.
In the particular case of XRP, there are several issues to analyze. On the one hand, bitcoin has a maximum limit of 21 million coins that will finish being broadcast in more than 100 years. This is a policy that has been very important for its perception as “digital gold.” Bitcoin’s guaranteed scarcity reinforces its value as a long-term store of value.
In contrast, XRP has a full supply much higher of 100,000 million unitsof which a large part is controlled and periodically released to the market (or repurchased) by Ripple Labswhich may influence its price and perception adversely. Unlike bitcoin, XRP is not an immutable, programmed monetary system, but is interfered with by a company.
Furthermore, bitcoin, due to its long history, decentralization, and lack of a known creator, enjoys a level of recognition and adoption that no cryptocurrency has achieved.
Bitcoin is accepted not only by individual investors but also increasingly by companies, financial institutions and even nation states as a legitimate form of investment and store of value.
On the other hand, XRP has faced significant challenges, including legal disputes and the perception that it is too centralized.
One of bitcoin’s key strengths is its complete decentralization; It is not controlled by any entity or individual. In this it contrasts greatly with XRP, where Ripple Labs plays a significant role in the validation node and in strategic decision making. This difference is fundamental, since decentralization is often seen as an indicator of security and stability.
On a legal level, BTC has established itself in such a way that, despite regulatory attention, it has continued to thrive without interventions altering its fundamental course. It is generally accepted as a commodity (merchandise) by most of the regulatory entities in the world, which means its sale does not have many legal obstacles.
XRP, on the other hand, has come under intense regulatory scrutinyparticularly by the SEC in the United States, which has generated uncertainty and volatility in its price. The regulator has considered thate XRP is an unregistered security (i.e. an illegal stock).
In short, a combination of guaranteed scarcity, independence from any central authority, broad adoption, and a robust and active community makes bitcoin an attractive option as a long-term store of value.
These factors not only help maintain its value but also ensure its continued relevance in the global financial ecosystem. Please note that BTC is one of the 10 most valuable financial assets in the world.
On the other hand, while XRP has uses that depend on the developments and commercial alliances of the company Ripple Labslacks some of the fundamental properties that have cemented bitcoin’s position as the undisputed leader in the space.
What has been said so far reinforces the idea that it is vital to maintain a balanced and critical perspective. The recent surge in XRP price, while impressive at first glance, should not divert our attention from the underlying fundamentals that dictate long-term value.
Let’s let the XRP Army celebrated. But let’s not forget that, although altcoins can offer short-term gains (or big losses, too), bitcoin remains the safest decision for those looking to preserve and grow their wealth over the long term.
As a conclusion, the words of Saifedean Ammous in his book “The Bitcoin Pattern” may be useful, detailing why what happens with altcoins and the perception of their value in the market happens:
«There is nothing original or difficult about copying the design of Bitcoin and producing a somewhat different imitation, something that thousands of people have already done to date. Over time, it can be expected that more and more coins of this type will enter the market, diluting the brand of all other altcoins. Except for Bitcoin, digital currencies are, on the whole, easy (not solid) money. Not a single altcoin can be considered on its own merits, since they are all indistinguishable in what they do, which in turn is what Bitcoin does, but they differ from the latter in that they can be easily altered. its offer and its design, while Bitcoin’s monetary policy is clearly immutable.
Saifedean Ammous, “The bitcoin pattern”, Valleta Ediciones, p.337
Disclaimer: The views and opinions expressed in this article belong to its author and do not necessarily reflect those of CriptoNoticias. The author’s opinion is for informational purposes and under no circumstances constitutes an investment recommendation or financial advice.
