Better Buy: Bitcoin VS Ethereum

Which crypto asset will generate bigger gains this year?

Last Updated December 31st 2021
5 Min Read

Bitcoin (BTC) and Ethereum (ETH) are two popular cryptocurrencies that have been on the investor’s radar for a longer period. Both assets have had their fair share of ups and downs in the market but still soars high in terms of market capitalization, institutional adoption, and price range. 

Bitcoin hit an all-time high of $68,789 on November 10 2021, and Ethereum on November 16, 2021, hit an all-time high of $4,891. Let’s see why investors are so curious about these two cryptocurrencies and further delve deeper to see which is a better buy this year, Bitcoin or Ethereum. 

Bitcoin Vs. Ethereum: An Analysis

Bitcoin and Ethereum are among the oldest and best cryptocurrencies available in the market today. Therefore, knowing which is the best to buy among the two is worth a read.

Bitcoin: The King Of Cryptocurrencies

Bitcoin is the pioneer of cryptocurrencies and has initiated the legion of other cryptos in the market. It was first traded in 2009 and is still steaming hot in the market in terms of price and market cap. Currently, the market cap of BTC is above $1 trillion and has a price range of $51,000. 

Here are some of the key factors that investors can consider while choosing between Bitcoin and Ethereum.

1) High Institutional Adoption

There is a growing amount of institutional interest for Bitcoin today in the market. Several big guns like Tesla, MicroStrategy, Square, etc., have invested a large sum in Bitcoin, expecting future returns. Tesla has bought almost $1.5 Billion worth of Bitcoin, and Square altogether holds a total of around $400 million worth of Bitcoin. 

2) Wide Acceptance, Stability, and Simplicity Of BTC

The significant reason why Bitcoin is a widely accepted cryptocurrency is that it is a decentralized currency. BTC is limited with a pre-defined maximum supply of 21,000,000 coins, and it is beyond the eyes of the Federal Reserve or any other central bank. Investors and traders get attracted to this unique cryptocurrency model as they can easily resonate with it.

"Bitcoin is a scarce digital currency and store of value. While still volatile, it tends to be one of the most stable cryptos, with the longest history. It has been the most consistent and best-performing investment asset year after year for the last ten years," says a crypto-asset broker Steve Ehrlich, CEO and co-founder at Voyager Digital.

Lolli was the first Bitcoin reward application that allowed people to earn Bitcoin while shopping online. The CEO and co-founder of Lolli, Alex Adelman, says, "We believe that Bitcoin is a revolutionary currency that's digitally scarce, that anyone in the world can participate in, which is unique to anything else."

3) Limited Supply Of BTC 

Bitcoin is not just a cryptocurrency for investors but also a digital gold. The limited supply of Bitcoin is the core reason for this increase in its value. Nearly 90% of Bitcoin has already been mined from the 21 Million BTC coins available. 

Through a process of Bitcoin halving, the rate of new BTC creation gets smaller over the passing period. Halving refers to how every four years, the block reward that is provided to the Bitcoin miners for processing transactions is being cut in half. This is done after every 210,000 blocks are mined. May 2020 was the last Bitcoin halving, and the next one is expected to be in 2024. 

Read More: Bitcoin Price Prediction

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Ethereum: The King Of DeFi Platform

Ethereum is the second-largest cryptocurrency which is not merely a token of exchange but also an advanced decentralized platform that enables Decentralized applications (DeFi) and smart contracts to be built on it. Today with a price range of $3,780, Ethereum ranks 2nd in the CoinMarketCap ranking. ETH has a market cap of around $449 billion and could be one of investors' best options. 

To continue with the debate of Bitcoin Vs. Ethereum, here are few factors which make Ethereum different from Bitcoin:

1) A Different Goal, A Different Purpose

Ethereum has a completely different purpose compared to Bitcoin. Precisely, it aims to create one computer for the entire world. That is, to build a global platform for decentralized applications that allows users to run and write software that is resilient to fraud, downtime, and censorship. 

"When people compare Bitcoin and Ethereum, it is a bit like comparing gold with electricity. They are both valuable but have very different uses," Adelman says.

2) Space For More Growth 

There's more scope for innovation and activities surrounding the Ethereum platform. Ether, Ethereum's utility token, is just limited by the ingenuity of the world's developers and nothing else. Apart from this, there are 247 Github Ethereum-related repositories to Bitcoin's four. The developers who collaborate through Github can access all the project information through these repositories, which are small project folders. Another extremely significant factor that boosts its growth is the growth of decentralized finance or DeFi platforms. 

3) An Underlying Change In The Creation Of Blocks 

Ethereum's plans to change its consensus mechanism from Proof-of-Work to Proof-of-Stake is going to increase its demands and growth in the crypto world. Polotsky, the CEO and founder of CoinFlip, says that "Proof of stake removes the costs associated with mining such as electricity and hardware costs, meaning that fewer ETH will be sold by miners. Instead, these ETH will be staked, driving up the value even further."

Check Out: Ethereum Price Predictions

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Should You Buy Bitcoin Or Ethereum? The Bottomline 

Well, concluding on the debate between Bitcoin VS Ethereum, which is a better buy, it is seen that both assets are poised to perform remarkably over time. Both are exceptionally good investments to consider for the long haul, as acceptance of cryptocurrencies is growing in today's world. 

Bitcoin is a more mainstream, popular, and stable coin, while Ethereum is made more of an advanced blockchain technology that shows steady growth. Analyzing their price range, market cap, and growth potential, it is now time for investors to choose the asset class that they prefer to secure their wealthy future.

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

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