There's plenty of growth in the crypto sector, so it's no surprise that investors look to the prospects of top coins like XRP (XRP 2.40%) and Chainlink (LINK 3.37%) in search of the one investment that can make them millions.
But do either of these coins have enough gas in the tank to actually be powerful engines of wealth creation, and is one a better pick than the other?
CRYPTO: XRP
Key Data Points
XRP is looking good here
At roughly $3.35 per coin (as of July 18), XRP has a market cap of almost $200 billion.
A 10-fold gain from here would vault its value to $2 trillion, putting it in the same ballpark as Bitcoin. That's not impossible, but it assumes a colossal influx of new capital. Of course, at that point, even if you had invested $10,000, it still wouldn't make you a millionaire.
But the coin's odds of making investors richer are still very good, even if it can't make them millions.
XRP's strengths are its appeal to institutional investors, who are its target audience, and its backing by Ripple, the company that issues it.
Those investors are looking for inexpensive and quick ways of managing their assets, not to mention access to yield from their stablecoin holdings and access to liquidity from lenders. XRP offers all those things. It also helps banks and institutional currency traders avoid exchange fees, as well as money transfer fees that they would otherwise pay when using legacy technologies.
Image source: Getty Images.
Ripple's technology strategy with the chain is to bake regulatory compliance tools directly into the XRP protocol, making it more palatable for banks and institutional investors that want highly streamlined solutions.
As long as there are asset holders with large sums of capital that aren't on the blockchain, XRP has a potential pool of users and capital with which to expand. That's likely to drive a lot of growth during the coming years, assuming that Ripple continues to correctly match its tech with what its audience wants.
CRYPTO: LINK
Key Data Points
Chainlink's growth story is taking off
Whereas XRP is essentially a fintech targeted at institutions, Chainlink's scope is more limited.
Its pitch is to be the middleware that provides the data sources ("oracles") that let blockchains talk to each other, and to traditional finance. It's a platform that enables a blockchain app developer to incorporate information such as stock prices into smart contracts meant to run on a chain, among many other possible implementations.
Chainlink trades at a price of about $17, with a market cap of more than $11 billion. A 10-fold gain would only ask the market to lay out an extra $100 billion, a far easier lift than the capital that a move of the same size would take with XRP. Still, a gain of that size wouldn't make investors into millionaires.
Because Chainlink's value accrues through usage of its oracle feeds, its upside is tied to the broader adoption of tokenization and decentralized applications (dApps). If asset managers continue to adopt its data oracles as part of their technology stack, Chainlink could grab toll‑booth fees on trillions of dollars in flows, enabling it to grow a lot in the process. So it could potentially expand more than XRP because it could piggyback on the inflows associated with XRP's user base to sell them its oracle platform.
The catch here is that demand is more indirect.
Banks can theoretically pay for oracle services without buying and holding huge balances of the coin. So price increases depend on its staking economics and its fee capture mechanics working as designed, and at a larger and larger scale. The emergence of competitors is bound to make that process a bit more difficult over time.
For investors comfortable with volatility and a longer time horizon, Chainlink thus offers a shot at outsized returns, but the road will be uneven.
There's a clear winner here, but both are competitive
If your goal is the highest probability of a solid gain during the next few years, XRP's more direct upside from its expanding institutional momentum wins the day.
The chain doesn't need to attract 100% of the institutional capital entering the crypto sector to flourish, and it could credibly deliver very large returns, even if it probably won't make anyone a millionaire.
If you can stomach uncertainty, Chainlink may outrun it if the thesis for buying XRP is proven correct and big banks and other large holders of capital migrate much of their managed wealth to its chain. These two coins offer services that are complementary, so they could both be decent investments.
Once again, as for becoming a millionaire from a tiny stake, neither coin is likely to deliver. But building some disciplined exposure to XRP could still move your portfolio meaningfully higher in the coming years, and Chainlink isn't a bad bet either.
