XRP has overcome its most significant challenge, but it still lacks clear catalysts.
Dogecoin is still a meme coin, making it difficult to value.
Many cryptocurrencies lost their luster over the past year. High Treasury yields, expectations for slower monetary easing, and waning institutional interest all chilled the market, while leveraged liquidations triggered incessant waves of profit-taking.
Some of those cryptocurrencies — especially “blue chip” ones like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) — could bounce back if the market warms up again this year. However, two other popular ones — XRP (CRYPTO: XRP) and Dogecoin (CRYPTO: DOGE) — could still underperform the market because they lack clear near-term catalysts.
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XRP and Dogecoin declined about 50% and 60%, respectively, over the past 12 months. By comparison, Bitcoin and Ethereum both lost roughly 30% of their value during the same period.
Last year, XRP overcame its biggest challenge: the SEC lawsuit against Ripple Labs, which started in 2020 and alleged the fintech company sold its own XRP holdings as unregistered securities to raise capital. That lawsuit concluded with a lighter-than-expected fine and a ruling that XRP wasn’t a security when sold to retail investors on public crypto exchanges.
That was great news for XRP, and it was relisted on the top crypto exchanges. The SEC also cleared its first spot price ETFs for trading in late 2025. However, XRP can’t be valued based on scarcity, since Ripple’s founders minted its entire supply of 100 billion tokens before launch. It also can’t be valued by its developer ecosystem, since it doesn’t natively support the smart contracts that are used to create decentralized apps and other crypto assets. XRP is mainly used as a “bridge currency” for cross-border transactions on Ripple’s platform, but stablecoins — which are pegged to the U.S. dollar — can do the same thing with less volatility.
Like Bitcoin, Dogecoin uses the energy-intensive (PoW) consensus mechanism for mining. But unlike Bitcoin, which has a maximum supply of 21 million tokens, Dogecoin doesn’t have a supply cap. Dogecoin’s supporters claim the design will encourage people to spend their coins rather than hoard them, but it can’t be valued solely for its scarcity.
Dogecoin also doesn’t natively support smart contracts, so it can’t be valued based on its usefulness to developers. Instead, it’s often driven higher by Elon Musk’s unpredictable tweets about the token, endorsements from celebrities like Mark Cuban and Snoop Dogg, as well as headline-grabbing attempts by smaller companies like CleanCore Solutions (NYSEMKT: ZONE) to build their own “Dogecoin Treasuries”.
XRP and Dogecoin might not sink lower this year, but they’ll struggle to gain more momentum. Investors will likely stick with Bitcoin for its scarcity and as a potential hedge against inflation, and consider Ethereum the top developer-oriented token. XRP, Dogecoin, and other altcoins that don’t fall neatly into either category could struggle to outperform the broader crypto market this year.
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and XRP. The Motley Fool has a disclosure policy.
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