Although $100 is far from a king's ransom nowadays, it could be the start of exciting long-term returns if you put it to work in the cryptocurrency market. Digital assets are known for their boom-and-bust volatility, but they tend to dramatically outperform traditional investments over the long term. Let's discuss some reasons XRP (XRP +1.24%) and Solana (SOL +3.58%) could make great picks in November and beyond.
XRP
If you put $100 into XRP 10 years ago, your position would be worth $54,000 today. That return highlights the potentially life-changing impacts of cryptocurrency investing.
XRP now has a market cap of $132 billion, which means gains like that are practically impossible in the future. That said, its utility-focused design and active developers could help it continue to reward investors.
CRYPTO: XRP
Key Data Points
Since its launch in 2012, XRP has aimed to solve some of the problems with earlier blockchain platforms like Bitcoin. It can process 1,500 transactions per second (compared to Bitcoin's sevem transactions per second) and has a rock-bottom fee of just 0.00001 XRP per transaction, which is less than a cent.
And while XRP's raw technical prowess has been overshadowed by new blockchain platforms like Solana, its development team, Ripple Labs, has done an impressive job of keeping its brainchild relevant.
Ripple Labs integrates XRP with its enterprise-focused fintech platforms, such as Ripple Payments, which allows clients to use the tokens for seamless cross-border payments. The developer has also created a stablecoin called RippleUSD, which shares the same ledger and fee structure as XRP, boosting transaction volume. Ripple is also aiming to cement its platform's brand reputation by pushing into mainstream finance by applying for a U.S. banking license in early July.
Solana
Blockchain technology has steadily improved as developers identify and fix the weaknesses in earlier networks. With its launch in 2020, Solana is a relative newcomer to the industry. And it leverages its impressive technical performance to serve as an alternative to legacy blockchains like Ethereum for the development of decentralized applications (dApps), which are open-source programs that run on the network.
CRYPTO: SOL
Key Data Points
Solana's stats lead the industry with a theoretical peak transaction capacity of 65,000 compared to Ethereum's capacity of 15 to 30 transactions per second. This advantage makes it ideal for popular dApp categories like decentralized finance, which include things like on-chain crypto exchanges, and cryptocurrency borrowing and lending. The platform has also become increasingly popular for high-profile meme coins like President Donald Trump's Official Trump Coin, which likely chose the network because of its scalability.
Image source: Getty Images.
While meme coins like the Trump version often deliver lackluster investment returns, they can benefit the Solana blockchain by increasing the network's transaction volume, which in turn boosts demand for its tokens to pay fees.
Long-term investors will also benefit from Solana's proof-of-stake block validation system, which allows holders to earn income by using their tokens to secure the network in return for rewards in the form of new tokens. According to data from cryptocurrency exchange Coinbase, the network currently offers a staking yield of 4.2% annually, which is significantly higher than the S&P 500 average dividend yield of 1.2%.
The climate is favorable
While XRP and Solana enjoy numerous asset-specific tailwinds, the outlook for the cryptocurrency industry as a whole is even more promising as investors become increasingly incentivized to diversify their currency exposure. The Dollar Index has already slid 7% year to date. And there are increasing fears that the U.S. dollar could be losing its dominant status in the global economy because of erratic trade policy and growing concerns about the Federal Reserve's independence.
Digital assets offer American investors the opportunity to diversify beyond the dollar while also potentially enjoying explosive gains. Solana and XRP appear well-positioned to lead the pack due to their impressive technical capabilities and growing mainstream adoption. That said, investors should be willing to stomach significant volatility.
