Most investors aren’t looking for cryptoassets to buy so that they can feel the thrill of risk, yet that’s exactly what many end up experiencing.
On that note, it’s pretty easy to take on more risk than intended, even if you’re sticking to mainstream cryptocurrencies like XRP(CRYPTO: XRP) and Cardano(CRYPTO: ADA). So if you’re trying to decide which form of risk you actually want to own, it’s worth taking a look under the hood with these two assets.
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The XRP Ledger (XRPL) was originally designed by its issuer, Ripple, to make cross-border money transfers cheaper and faster than legacy payment networks such as SWIFT. Ripple’s current cross-border solution routes both stablecoins and XRP across the ledger, with ample on and off ramps back into local currencies for banks and fintechs.
At today’s market cap of roughly $120 billion, XRP is a large-cap crypto asset with a deep existing holder base. That scale doesn’t make it resistant to downturns or even collapses, but it does mean that there’s already a substantial amount of capital committed to the network.
Ripple has also spent the past couple of years broadening XRP’s economic base to make it a more attractive tool for financial institutions to use in their backend workflows. The company launched a U.S. dollar stablecoin in late 2024 and its market cap already exceeds $1 billion, making it one of the larger dollar-pegged coin available.
The stablecoin is being stitched directly into the Ripple Payments service so that institutions can use it for cross-border settlements and treasury operations rather than holding working capital balances at multiple correspondent banks in each jurisdiction where they do business. There’s also an ongoing pilot program testing it in a real-world payment processing situation for a major credit card provider.
But XRP still carries a lot of risk. Despite its institutional proclivities, it’s exposed to crypto market cycles, potential policy reversals, and the chance that banks decide stablecoin-based systems are more trouble than they are worth. And it’s far from the only fintech platform that’s vying for a share of the capital that the banks have on hand.
Cardano, in contrast to XRP, is a general-purpose smart contract chain that is not leading in any of today’s dominant narratives. Its decentralized finance (DeFi) activity and app ecosystem lag far behind the leading chains, with a modest number of active decentralized applications and a relatively small pool of capital in its protocols.
And, with a market cap of about $15 billion, Cardano is an order of magnitude smaller than XRP, which could imply that it will grow more proportionally — or that it will be more volatile, and experience more downside. That smaller base, combined with a slower-growing ecosystem, increases the pressure for a big, new catalyst.
The chain’s new integration with the x402 payment standard is exactly that kind of swing. If you aren’t familiar, x402 is a way for websites to request payment directly in a user’s web browser in response to attempting to access specific content or data, all without an account or any signups needed. It is designed to let clients, including artificial intelligence (AI) agents, send highly convenient and instant stablecoin-based payments over the web.
If Cardano’s x402 gambit pays off, theoretically it would enable a kind of AI-native economy built on continuous micropayments that would be settled using Cardano, which could boost the demand for the coin by quite a bit. More on-chain commerce would mean more fees, demand for ADA coins as a staking and governance asset, and reasons for developers to build Cardano-native services that plug into the x402 flow.
The catch is that almost all of this is speculative. Nothing guarantees that Cardano will be the main place where AI agents choose to pay. The chain also still needs to prove that it can attract and retain enough developers to turn the x402 integration into real applications, not just a roadmap.
So while x402 gives ADA a fresh story and genuine upside, it also concentrates a lot of its forward-looking investment thesis into one emerging standard that may or may not catch on in the way advocates hope.
And, in light of everything else about Cardano, that’s what makes it a much riskier coin to buy now. If it manages to gain significant traction, that might change, but for now, it’s probably better to avoid buying it, as it’s simply too much risk to take on for an uncertain reward.
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends XRP. The Motley Fool has a disclosure policy.
