Alex Carchidi, The Motley Fool
5 min read
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XRP and Shiba Inu could both gain a lot of value over time.
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Only one of the pair of cryptocurrencies has a credible shot at making it to $5.
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That path to $5 probably won't happen as quickly as some investors are hoping.
XRP (CRYPTO: XRP) and Shiba Inu (CRYPTO: SHIB) are both subjected to a never-ending cyclone of heady price targets promoted by their evangelists. As it so happens, in the past, some of those high prices have been hit and even exceeded.
But which of these coins is more likely to go to $5, given where they are now and the drivers for their success (or lack thereof)? Let's dig into the details.
XRP and Shiba Inu have both been called meme coins, though when referring to the former asset, it's mostly been a barely veiled jab rather than a serious factual claim.
Whereas Shiba Inu is transparently a token that has no utility and is barely credible as a store of value, XRP is both useful as a tool and as an asset. Its market cap of $142 billion is the result of banks, currency exchanges, and institutional investors buying and holding it so that they can use it to cheaply make international money transfers and avoid exchange fees. Plus, its blockchain is home to stablecoins that are used to process payments.
The issuer of XRP, Ripple, is also continuing to invest in building out the chain's technology to make it a more attractive place for holders of large amounts of capital to park it there. That includes making native features those holders need, like for regulatory compliance, as well as providing platforms for lending and borrowing. And in the future, the chain aims to be a place for money managers to hold their assets on the blockchain so that they can be handled with less friction than legacy technologies.
Neither asset is anywhere close to $5; XRP's price is about $2.40, whereas Shiba Inu's is $0.000015, a tiny fraction of a penny. Therefore, on the basis of the math, XRP only needs to slightly more than double to hit the target, while Shiba Inu would need to rise by several orders of magnitude and then some. Don't hold your breath for that to happen.
There also is a deeper reason that XRP is the better investment regardless of the $5 target. Its price at any given moment, while linked to the market's sentiment about the coin, is not solely dependent on sentiment in the long run because its value is likely to increase over time as a result of the work that Ripple is investing in it. While Shiba Inu's team has also attempted to develop features around it, like the Shibarium Layer-2 (L2) chain, there's little reason to expect capital to flow there in substantial quantities.
