XRP’s utility advantages over Bitcoin and Ethereum could also help it outperform Palantir.
So far in 2025, Palantir Technologies (NASDAQ: PLTR) has been a much bigger winner for investors than XRP (CRYPTO: XRP). Palantir’s share price has more than doubled year to date despite a recent sell-off. XRP has delivered a gain of more than 40% — impressive but nowhere close to Palantir’s sizzling return.
However, I think the disclaimers you’ll often see about investments are right: “Past performance is no guarantee of future results.” I’ll even go a step further. I predict that XRP will trounce Palantir over the next five years. Here are three reasons why.
Don’t get me wrong: I fully expect Palantir to continue delivering robust revenue and earnings growth. My prediction doesn’t hinge on the artificial intelligence (AI) and data analytics software maker’s business stumbling at all.
I do think, though, that Palantir’s valuation will get in the way of its stock performance. The company’s forward price-to-earnings (P/E) ratio is almost 244. That’s a nosebleed level by any stretch of the imagination.
Do Palantir’s growth prospects make that jaw-dropping forward earnings multiple more palatable? Maybe a little, but not nearly enough. Palantir’s price-to-earnings-to-growth (PEG) ratio, which factors in analysts’ five-year earnings growth projections, is 4.12, according to LSEG. This ratio shows that the company’s growth is more than baked into its share price.
Admittedly, whether or not XRP’s valuation is underpriced, close to fair value, or overpriced is much harder to determine. However, like all other assets, the prices of cryptocurrencies follow the law of supply and demand. As we’re about to see, I expect the demand for XRP to rise faster than its circulating supply.
I believe it’s almost a no-brainer prediction that investor interest in XRP is about to increase significantly. Two factors should make this come true.
First, the U.S. Securities and Exchange Commission (SEC) will likely allow exchange-traded funds (ETFs) to own XRP soon. Sure, the agency recently delayed deciding until October. However, it has already cleared the way for spot Bitcoin ETFs and spot Ethereum ETFs. I’m optimistic about a ruling favorable for XRP.
Assuming spot XRP ETFs are indeed approved by the SEC, those funds will begin buying XRP tokens hand over fist (driving up demand in the process). If the ETFs are a hit with investors, the growth in demand will be even greater.
Second, President Trump recently signed an executive order that could clear the way for 401(k) accounts to own alternative assets, including cryptocurrencies. The combination of this move with the potential introduction of spot XRP ETFs should provide a huge tailwind for XRP.
My third reason for predicting that XRP will trounce Palantir over the next five years is admittedly less solid than my first two reasons. I think we’ll see much broader recognition of XRP’s utility in the second half of the decade. Granted, this is just a hunch. However, I believe it’s a reasonable hunch.
The fact is that XRP offers greater utility than Bitcoin. Settlements on the XRP Ledger take only three to five seconds, a fraction of the roughly 500 seconds that can be required for Bitcoin settlements. Transaction costs for XRP are also minuscule compared to Bitcoin ($0.0002 per transaction versus $0.50 per transaction). XRP is also more scalable and consumes far less energy than Bitcoin.
What about how XRP stacks up against Ethereum? XRP is much faster, processing up to 1,500 transactions per second compared to around 15 transactions per second for Ethereum. The “gas fees” for Etheruem are also much higher than XRP’s low transaction costs.
XRP appears to be a much better solution for cross-border payments and microtransactions than either Bitcoin or Ethereum. If financial institutions and individual consumers understand this more over time (which I think will happen), XRP should decrease the gap between its market cap and the two more widely adopted cryptocurrencies — and is likely to outperform Palantir in the process.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, Palantir Technologies, and XRP. The Motley Fool has a disclosure policy.
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