Better Buy in 2026: Ethereum or XRP?

Heading into 2026, a popular investment thesis for crypto investors is the blurring of the lines between traditional financial and blockchain finance. In other words, Wall Street firms are increasingly embracing new blockchain-based solutions, and that's creating all sorts of new investment opportunities in the crypto sector.

That's good news for two cryptocurrencies -- Ethereum (CRYPTO: ETH) and XRP (CRYPTO: XRP) -- at the forefront of this trend. So which one is the better buy next year?

Ethereum

If size and scale is the only thing that matters, then Ethereum is the better buy, and it's not even close. Ethereum is a Layer 1 blockchain network that's involved in every aspect of the transformation of the modern financial world. Ethereum is now the preferred blockchain of Wall Street, as well as the clear leader in decentralized finance (DeFi).

Image source: Getty Images.

What's particularly exciting now is how new crypto legislation from Congress is setting up to give Ethereum an even bigger boost. For example, new stablecoin legislation provides strong tailwinds for Ethereum heading into 2026.

That's because Ethereum is the No. 1 blockchain for stablecoins right now. If stablecoins continue to take off next year, they will likely be running on Ethereum's blockchain. That means more users, more transaction activity, and more revenue for members of the Ethereum blockchain ecosystem.

At the same time, the Trump administration has directly acknowledged the strategic importance of Ethereum. When the White House called for creating the U.S. Digital Asset Stockpile in March, it made Ethereum a key centerpiece of this effort. At the same time, key figures within the Trump administration have talked up the importance of Ethereum in terms of making America the "crypto capital of the world."

XRP

By way of comparison, XRP's scale and scope is much more limited. XRP is primarily a bridge currency used for cross-border financial transactions. Simply put, it's often easier, cheaper, and faster to move money around the world on the XRP blockchain ledger than using conventional technology.

Where things get interesting for XRP is in terms of how big this market opportunity might actually be. Heading into 2025, the thinking was that the XRP blockchain ledger might one day supplant the legacy SWIFT payment network as the preferred way to move money around the world.

According to some estimates, $150 trillion in volume runs through SWIFT every year. So if the XRP blockchain ledger is able to capture even just a tiny slice of this activity, it could create a vast surge in demand for the XRP coin.

But here's the frustrating thing about XRP: The hype and buzz have a way of getting out of control, leading to unrealistic expectations about where the price of XRP might be going next.

Case in point: After a test of XRP's blockchain technology in the fall, it now looks like SWIFT will be working with other blockchain tech providers instead. The talk now is that, instead of XRP making SWIFT irrelevant, SWIFT is making XRP irrelevant.

Of particular concern, the surge in popularity around stablecoins has diminished some of the allure of XRP. At the end of the day, it could be easier to use stablecoins -- which are digital currencies pegged 1-to-1 to the dollar -- to move money around the world.

Future price predictions

In terms of future upside potential, both XRP and Ethereum are intriguing options. It's best to compare apples with apples and oranges with oranges, so let's take a look at recent price targets for both cryptocurrencies from Standard Chartered.

According to Standard Chartered, XRP could hit a price of $8 by the end of 2026, and a price of $12.50 by 2028. At the same time, the bank thinks Ethereum could hit a price of $7,500 by 2026, and a price of $25,000 by 2028.

Based on current prices of $2 for XRP and $3,200 for Ethereum (as of Dec. 11), it appears that Ethereum has greater upside potential. It could deliver eightfold returns within the next few years, compared to sixfold returns for XRP.

This makes sense. As noted above, Ethereum is active in many more areas of the financial world than XRP, and its upside potential should be much higher as a result.

As a result, the better buy in 2026 is Ethereum. I wouldn't be surprised at all if it makes another run at the $5,000 price level early next year, buoyed by even more support from a decidedly pro-crypto administration.

Dominic Basulto has positions in Ethereum and XRP. The Motley Fool has positions in and recommends Ethereum and XRP. The Motley Fool has a disclosure policy.