The two most prominent brands in crypto today are Bitcoin and Ethereum. Both have supporting communities arguing the superiority of each. As the largest cryptocurrencies, an argument can be made for why they are great investments. Despite the comparisons between Bitcoin and Ethereum, they are pretty dissimilar.
- Bitcoin is the single best-performing investment in the last decade. It is so popular that people routinely use the term Bitcoin interchangeably with cryptocurrency.
- Ethereum generated much interest for its long-term potential. While Bitcoin is strictly a cryptocurrency, Ethereum is an entire network with a lot more diverse potential for long-term applications. Ethereum’s value has increased by nearly 1,100 times in the last seven years.
The stories of Bitcoin and Ethereum are similar. However, there are apparent differences when examining these crypto coins at a closer look. Let’s take a closer look at both Bitcoin and Ethereum, providing some insight into the better investment.
Historical Growth
Bitcoin hit the market in 2009. At that time, a single Bitcoin was worth less than 1 cent. By last November, the price had risen to nearly $69,000. This massive jump in value wasn’t without the unpredictable dips and volatility that the crypto markets continue to experience.
Ethereum is a network. Its coin is Ether, first traded in 2015 and had an original value of fewer than three dollars. These days, Ether’s value has increased to a high at $4,891, having just occurred in November at the same time Bitcoin did.
Both Bitcoin and Ethereum have settled down from those values. Nonetheless, investors assume growth for the foreseeable future on both cryptocurrencies. Where your money will grow more is up for debate.
Benefits of Ethereum
Ethereum’s market cap is far less than Bitcoin presently, at slightly more than $380 billion. However, no other crypto coin is worth more than $100 billion today. It’s a massive accomplishment regardless of Ethereum’s market value compared to Bitcoin’s.
Ethereum shows more potential than Bitcoin in its utility. Bitcoin is a cryptocurrency with nothing else to it. Ethereum is an infrastructure that can house other cryptocurrencies. Other features include:
- People can develop apps and software.
- NFTs are traded freely across Ethereum.
- Decentralized finance systems are built on it each day.
When you buy Ethereum, you buy into a value fixated on an entire network rather than purely a coin. Ethereum transactions are faster, which can be particularly beneficial if you’re at a BTC machine such as Bitcoin4U or making a trade where speed is essential.
A drawback to Ethereum is that its fees are high. Even for small transactions, the costs are sizeable. This gay has allowed competing cryptocurrency networks, including Solana and Avalanche, to arise with a low-fee model. An update to the Ethereum network is appropriately titled ETH 2.0, which addresses this fee issue. The update also reduces Ethereum’s energy consumption by 99%. The only problem is that no one knows when ETH 2.0 will be fully available.
Benefits of Bitcoin
Today’s Bitcoin market cap is around the $800 million mark. A big appeal of Bitcoin is its scarcity, which has helped drive up its value. Only 21 million Bitcoin can exist on its network. Of these, more than 18.9 million have been mined.
Investors buy Bitcoin because it is the gold standard in the crypto world. Bitcoin is the first cryptocurrency to have futures contracts offered on and the first to have a crypto-based exchange-traded fund in its name. Major corporations like Nike, Best Buy, Priceline, and Groupon have adopted this cryptocurrency. There are even Bitcoin-rewards credit cards offered from Mastercard and VISA. It is more integrated into mainstream financials than Ethereum.
There are some concerns with Bitcoin. Federal governments have been hesitant to embrace it, fearing it could disrupt their currencies or impact systems of taxation. Bitcoin is also the worst cryptocurrency in using energy and its environmental impact, consuming 0.5% of all worldwide electricity. Bitcoin has been highly criticized for its lack of eco-friendliness.
Long-Term Value
If your goal is to go to a BTC machine near you and buy a crypto coin, most experts recommend Ethereum over Bitcoin. While Bitcoin comes with a lot of value and growth, its lack of utility is worrisome. Ethereum has the potential to make Ether the leading crypto coin in a small number of years.
Despite this being the clear recommendation, some may still invest in Bitcoin and rightfully so. Ethereum has a lot of competition. A better cryptocurrency network could gain traction and momentum in the next decade, blowing past Ethereum’s current trajectory. While this scenario isn’t likely, it is within the realm of possibility considering the volatility of crypto markets.
Bitcoin and Ethereum are both great places to store value. As both are must-owns for many investors, it’s really up to you as to where you see tremendous long-term potential. There is a compelling argument made for both cryptocurrencies in a side-by-side comparison.
