XRP’s recent surge above $3 has been a cause for celebration for the XRP community, affectionately known as the XRP Army.

Social media has been filled with jubilant messages, triumphant memes and a palpable sense of victory. No wonder. These are prices that have not been seen for 7 years.

However, before we get carried away by the collective euphoria, it is essential to make a more critical and thoughtful assessment of the true value of XRP. In particular, it is useful to compare it to a strong currency, such as bitcoin (BTC), and not against a constantly depreciating currency, such as the dollar.

When we measure the value of XRP in BTC, the recent rise looks more like a small fluctuation than a real victory.

According to the chart below, XRP has shown a relatively modest increase that doesn't seem like a big deal.

Historical chart of XRP price, measured in bitcoin. Source: TradingView.

And why does this happen? First of all, it is worth clarifying that this is something that happens with many altcoins. Although their price in fiat money increases, their price in BTC tends to decrease.

In the particular case of XRP, there are several issues to consider. On the one hand, bitcoin has a maximum limit of 21 million coins that will be finished issuing in more than 100 years. This is a policy that has been very important for its perception as “digital gold.” The guaranteed scarcity of bitcoin reinforces its value as a long-term store of value.

In contrast, XRP has a much higher total supply of 100 billion units, a large portion of which is controlled and periodically released to the market (or bought back) by Ripple Labs, which can adversely influence its price and perception. Unlike bitcoin, XRP is not an immutable, programmed monetary system, but is instead interfered with by a corporation.

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 increasingly by businesses, financial institutions and even nation states as a legitimate form of investment and store of value.

20 publicly traded companies with the most bitcoin in their treasuries. Source: BitcoinTreasuries.

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 single entity or individual. This is in stark contrast to XRP, where Ripple Labs plays a significant role in node validation and strategic decision-making. This difference is critical, as 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 that alter its fundamental course. It is generally accepted as a commodity by most regulatory bodies around the world, which means its purchase and sale does not have many legal obstacles.

XRP, on the other hand, has been the subject of intense regulatory scrutiny, particularly by the SEC in the United States, which has led to uncertainty and volatility in its price. This is because the regulator has deemed XRP to be an unregistered security (i.e. an illegal stock exchange) .

In short, a combination of guaranteed scarcity, independence from any central authority, wide 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. Note that BTC is one of the top 10 most valuable financial assets in the world.

10 most valuable financial assets in the world. Source: CompaniesMarketCap.

On the other hand, while XRP has uses that depend on the developments and business partnerships of the Ripple Labs company, it lacks 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 the XRP Army celebrate. But let’s not forget that while altcoins can offer short-term gains (or big losses, too), bitcoin remains the safest choice for those looking to preserve and grow their wealth over time.

In conclusion, the words of Saifedean Ammous in his book “The Bitcoin Standard” may be useful, detailing why what happens with altcoins and the perception of their value in the market:

“There is nothing original or difficult about copying Bitcoin’s design and producing a slightly different imitation, something that thousands of people have already done so far. Over time, we can expect more and more such coins to enter the market, diluting the brand of all other altcoins. Except for Bitcoin, digital currencies are, as a whole, easy (not sound) money. Not a single altcoin can be considered on its own merits, as they are all indistinguishable in what they do, which in turn is what Bitcoin does, but they differ from the latter in that their supply and design can be easily altered, whereas Bitcoin’s monetary policy is clearly set in stone.”