Even if you only have $1,500 on hand to invest in the cryptocurrency sector, it behooves you to deploy your capital judiciously rather than frivolously. With so many cryptocurrency opportunities abounding right now -- including quite a few opportunities to lose all of your money -- sticking to the highest-quality assets is simply not optional.
With that in mind, let's dig into one top crypto coin that's worth considering an investment in, and then take a beat to understand another popular coin that could be a fast trip to nearly zeroing out your invested cash.
This coin is becoming part of the world's financial infrastructure
XRP (XRP 2.03%) has one thing going for it that most cryptocurrencies struggle with: a use case that big financial institutions are on board with. As of Feb. 5, the chain reported $9.8 billion in 24-hour volume, making it one of the most used chains in the crypto sector.
CRYPTO: XRP
Key Data Points
To accomplish that, XRP was used as a medium of transfer between entities across borders in the global financial system. In other words, it's a quick and cheap way to get money from point A to point B in comparison to the legacy technologies, which often take days for transactions to close, and which often feature high fees.
Bank of America and JPMorgan Chase are already using the coin in that capacity, and more financial institutions are likely to join them if it continues to reduce the friction of international transfers. What's more, it might be under consideration to be included in the U.S. national cryptocurrency reserve, if such a thing is ever created. That'd provide a long-term driver of higher prices by way of taking some supply off the table, assuming the supply contained in the reserve was not actively spent.
The things described above are all well and good elements of an investment thesis that calls for buying XRP. Many more positive factors are working in its favor that are worthy of discussion. But, in the context of deciding which coin is worth investing $1,500 in, it's the clear winner, so let's check out the coin to avoid to show why that's the case.
This coin is pretty much the same as it ever was
You shouldn't even think about investing $1,500 in a meme coin like Dogecoin (DOGE 3.07%) when you haven't packed your portfolio with stronger assets like XRP. There's simply no contest here.
CRYPTO: DOGE
Key Data Points
Dogecoin's status a the king of meme coins means that it probably will not go to zero anytime soon. Beyond that, there is not a clear investment thesis for buying it, aside from the high probability that it will someday have yet another hype-driven run-up, as initiated by a larger cryptocurrency bubble.
Nor is there a way for this thesis to be bolstered by the actions taken by a governance team, like XRP has. Dogecoin exists as it is today, and it is more or less immutable. There's no room for adaptation or innovation in response to trends in cryptocurrency or society. And while its "brand" does have some value as the world's biggest meme coin, it is very uncertain how that value might increase in the future, not to mention how investors could tap into it to get a consistent return for themselves.
Nonetheless, many investors probably think that they could time an investment in Dogecoin appropriately by paying enough attention to its price chart. While it may be possible, for every investor who nails it by buying and selling at the right times, there are more likely to be a handful who fail and end up sitting on significant losses instead. Holding onto those losses for years could eventually reverse them, but few are patient enough.
So don't invest your $1,500 into Dogecoin right now. Think about buying XRP instead. Once you've fully diversified your portfolio with stronger cryptocurrency assets, it won't be as irresponsible to think about allocating a small slice of capital to the riskiest plays. But until then, steer clear, as there are better investments out there, and far better ways to build your wealth over the long term than with meme coins.
