At the moment, a couple of cryptocurrencies in particular have a tendency to steal the spotlight. There's XRP, (XRP 2.17%) Ripple's fintech coin targeted at banks and financial institutions, and Zcash, (ZEC +3.58%) a privacy coin that's essentially a copy of Bitcoin (BTC 1.96%) in most respects.
But which coin is the better place to allocate $1,500 right now? Let's dive in and evaluate the case for each.
Image source: Getty Images.
This coin offers plenty of financial utility
XRP lives on the XRP Ledger (XRPL), a blockchain developed by Ripple and built to move value quickly and cheaply, especially across currencies, and therefore across borders. The core reason to consider buying it now is that Ripple is heavily incentivized to continue to develop the XRPL to be a platform that generates demand for XRP, as XRP is at the heart of the financial services that the company uses the chain to provide.
The ledger has a built-in decentralized exchange (DEX) and cheap transaction fees, so that capital can easily flow from one asset to another without leaving the platform. With the help of a slew of recent acquisitions, Ripple is layering on a product suite on top of those pillars, including tools for making payments, treasury management, and providing stablecoin-based flows targeted at banks and fintech companies.
CRYPTO: XRP
Key Data Points
If more financial institutions route payments over XRPL or use Ripple's products, that activity should show up as ongoing demand for XRP to pay fees and bridge between currencies. That essentially forces users to hold XRP as part of their working capital instead of holding a variety of different currencies, which tends to benefit them. This is because it's simpler operationally, and it also compresses all of the different currency value fluctuation risks into one cryptocurrency.
For a long-term investor, that mix of real-world usage, scale, and a still-meaningful growth runway is exactly what you want to see.
Zcash's next act might be its greatest yet
Zcash takes a very different approach, and as a result it serves a pretty different niche in a portfolio compared to XRP.
In terms of its supply dynamics, it's a copy of Bitcoin, with a capped supply of 21 million coins and a proof-of-work (PoW) design. But in addition to that, it adds the capability for making wallet addresses and transactions private using a type of cryptographic proofs called zk-SNARKs. You don't need to think too much about the technical details here, just know that the zk-SNARKs let fully encrypted transactions remain valid on-chain without revealing sender, receiver, or amounts, and that the proofs themselves were invented well after Bitcoin's debut. That latter point is important, as privacy has long been one of the features thought to be missing from Bitcoin.
CRYPTO: ZEC
Key Data Points
On paper, all of that makes Zcash a candidate to be privacy-first digital gold. In practice, it is much smaller and more constrained. Zcash's market cap is roughly $6 billion. That is tiny next to Bitcoin's multi-trillion-dollar footprint and even modest compared with XRP's market cap of $125 billion.
The bigger issue is regulatory posture. Privacy coins have drawn sustained scrutiny from policymakers who worry about money laundering and sanctions evasion. Some major crypto exchanges have restricted or delisted parts of the privacy-coin segment altogether (though at least one exchange recently relisted Zcash specifically), and institutional platforms often simply exclude privacy coins. That makes it a bit harder for Zcash to grow into a mainstream store-of-value asset like Bitcoin, even if its tech is decent.
What's the right call?
I own both XRP (via an exchange-traded fund) and Zcash. But for most investors, there's not much of a contest here for determining where to allocate $1,500.
Zcash asks you to bet that regulators will eventually embrace or at least tolerate strong on-chain privacy at scale, and that large pools of capital will eventually be willing to adopt what today is a relatively small asset as a store of value. Those are both shaky propositions.
In contrast, XRP asks you to bet that Ripple will continue to sign up banks and fintechs and build out the XRPL's features, thereby supporting coin demand. The potential upside is probably a bit higher for Zcash, but it's significantly riskier, and it isn't as though XRP is a low-risk investment, either.
Therefore, for most long-term investors, XRP has a clearer path, more potential users, and fewer structural barriers, so it's significantly more likely to pay off. And that's what makes it the better cryptocurrency to buy with $1,500.
