XRP (CRYPTO: XRP) and Shiba Inu (CRYPTO: SHIB) went in opposite directions during the past 12 months.

XRP, the native cryptocurrency of the Ripple blockchain, surged about 280% as it overcame its biggest regulatory challenges.

In a world awash with cryptocurrency options, it can be difficult to sort through the best tokens to put in your portfolio.

One way to filter through the noise is to examine the performance differential between two tokens over a given period of time. If one token is drastically outperforming the other, it could indicate that one is being sold out of while the other is gaining favor among investors.

In the past 12 months, two tokens that went in very different directions were XRP (CRYPTO:XRP), the native cryptocurrency of the Ripple blockchain, and Shiba Inu (CRYPTO:SHIB), a token that began as a parody of the Dogecoin cryptocurrency.

XRP, the seventh-largest cryptocurrency, surged about 280% as it overcame its biggest regulatory challenges and announced several new products and partnerships.

Shiba Inu, the 14th-largest cryptocurrency, had a rougher year as its price was cut in half. Investors grew skeptical of the long-term growth potential for the token as it faced sluggish development and limited attention for new products.

So should investors keep chasing XRP at these levels and avoid Shiba Inu? Let’s review these two volatile cryptocurrencies and see which one is a better buy.

Shiba Inu is a token that was launched on the Ethereum blockchain in 2020. Ethereum was originally a proof-of-work blockchain, but it transitioned to the more energy-efficient proof-of-stake mechanism in 2022.

As a PoS blockchain, Ethereum supports smart contracts, which can be used to develop decentralized apps. Its tokens can also be “staked” to earn interest-like rewards.

Shiba Inu is expanding that developer ecosystem with its own Layer-2 blockchain protocol Shibarium, which supports faster transactions, and its cross-chain decentralized exchange (DEX) ShibaDEX, which links its blockchain to other PoS tokens.

Shiba Inu’s developers pre-mined its entire supply of nearly 1 quadrillion tokens before its launch, but it has already burned (or taken out of circulation) more than 40% of those tokens to tighten up its supply. That’s why it’s a deflationary token.

Ripple uses its blockchain to route real-time gross payments, remittance transfers, and currency exchange transactions. It launched XRP as the platform’s native cryptocurrency in 2013, and it pre-mined its entire supply of 100 billion tokens before it even started trading.

Only 58 billion of those tokens are in circulation today, while the rest remain locked up in Ripple’s own escrow accounts. Ripple periodically releases those tokens to stabilize its liquidity, but that strategy makes it inflationary.

Originally, Ripple hoped that its payment platform’s financial clients — including Travelex Bank, Tranglo, and Sentbe — would adopt XRP instead of fiat currencies for their financial transactions. But that never happened, and Ripple’s blockchain faced obvious limitations: It could neither be used to mine other cryptocurrencies like proof-of-work (PoW) blockchains nor develop decentralized apps and tokens like proof-of-stake (PoS) blockchains.

Both of these cryptocurrencies have struggled to gain attention from institutional investors, despite the fact that several major firms filed applications with the U.S. Securities and Exchange Commission earlier this year to launch their own exchange-traded funds (ETFs) that would track the spot prices of Bitcoin and Ethereum.

After the SEC approved two Bitcoin futures ETFs last October, many cryptocurrency traders assumed that ETF approvals would come quickly in 2024. But to the surprise of many investors, the SEC has largely focused on approving new bond ETFs and shutting down several cryptocurrency-related lawsuits.

As the SEC continues to review those applications, most cryptocurrency traders believe that Bitcoin and Ethereum ETFs could be approved by the fourth quarter of 2, and the first of these ETFs to be approved would likely set off a chain reaction of approvals for other cryptocurrencies.

What are the biggest catalysts for XRP in 2024?

In the past couple of years, XRP’s price was driven higher by the end of its regulatory challenges. The SEC’s protracted lawsuit against Ripple — which alleged its initial coin offerings were illegal sales of unregistered securities — finally ended with a slap on the wrist and a lighter-than-expected settlement.

After that victory, most of the major crypto trading platforms reopened trading for XRP, and several crypto firms filed to launch their own spot price ETFs for the token.

If the SEC approves a few of these ETF applications, it could easily pave the way for more to follow, which could easily keep pushing up XRP’s price throughout the year.

XRP is also being helped by the expansion of Ripple’s ecosystem. The fintech firm has been integrating Ethereum-compatible smart contracts into a new sidechain tethered to the XRP Ledger, urging investors to tokenize their real-world assets (like real estate,