Bitcoin Vs. Ethereum Vs. Cardano: Which Cryptocurrency Is a Buy?

Last Updated January 31st 2022
10 Min Read

Learn more about the pros and cons of investing in Bitcoin, Ethereum, and Cardano to decide which of these is a good buy. 

Key Points

  • Bitcoin, Ethereum, and Cardano have the potential to generate good returns over the long run. 
  • Every cryptocurrency comes with its own risk and reward potential. 
  • It is essential to consider your risk tolerance level before investing in any cryptocurrency. 

With ever-increasing popularity, cryptocurrencies show no signs of stopping any time soon. Few coins were in a tremendous rally in 2021. Before investing in any cryptocurrency, it is crucial to be aware of both the advantages and disadvantages of the coin you choose. Therefore let’s go through the pros and cons of Bitcoin vs. Ethereum vs. Cardano and discover which cryptocurrency is a good buy, 

Bitcoin (BTC), Ethereum (ETH), and Cardano (ADA) are the three most popular cryptocurrencies in the market today. With significant rallies and interest from investors, these coins have experienced explosive growth over the years. The price of BTC has soared almost 165.83% over the past 12 months, while ETH had a whopping surge of over 631.35%. ADA increased nearly 832.69% since the beginning of 2021.

 

Bitcoin (BTC)

Bitcoin’s increased institutional adoption could make it a good buy, but its non-sustainable nature would be a drawback. 

The concept of cryptocurrencies was born with Bitcoin, making it the undisputed leader of the crypto space. It sparked a revolution that empowered several people and institutions worldwide to dive into the blockchain world, establishing cryptocurrencies as a viable investment asset class. The price of BTC saw a colossal rise since the beginning of 2021. So is Bitcoin a good buy now? Let us see the pros and cons of investing in it.

Pros Of Investing In Bitcoin 

The key reason why investors buy Bitcoin over other cryptocurrencies is its first-mover advantage. Since it is the ‘face of cryptocurrencies,’ Bitcoin has strong brand recognition and has positioned itself as a potential investment asset. Moreover, several investors consider investing in Bitcoin as a hedge against economic fluctuation or inflation. 

Additionally, its growing popularity among institutional investors also poses a significant advantage. Several businesses have started accepting BTC as a form of payment, re-affirming its position in the market. Furthermore, established institutions like Tesla, Square, and MicroStrategy hold Bitcoin on their balance sheets. Additionally, over 2300 businesses have spoken about accepting BTC as their method of payment in the US. Therefore, part of the reason why the price of BTC rose significantly is its popularity among institutional investors.

Bitcoin’s limited supply of 21,000,000 is yet another advantage of investing in BTC. The scarcity will eventually drive the value and price of BTC to record heights. In addition, Bitcoin has over 5 million users on the network, and many more are joining each passing day. The strong network fundamentals and an established user base give Bitcoin an added advantage over Ethereum and Cardano. 

Cons Of Investing In Bitcoin 

One of the major disadvantages of buying Bitcoin over ETH and ADA is its incredibly energy-intensive mining process. Major investors like Elon Musk have spoken about Bitcoin’s lack of sustainability. Data from the University of Cambridge states that Bitcoin mining uses more electricity than the entire country of the Philippines. 

Bitcoin’s high volatility is yet another con of investing in the crypto. It is a risky investment as the prices are prone to sudden and unpredictable changes. It is always best to be aware of BTC’s volatile market before investing.

Don't Miss: Bitcoin Price Predictions

Ethereum (ETH)

Although the crypto lacks wide acceptance, the latest upgrade could make Ethereum a profitable investment over others for future returns. 

The overwhelming performance of Ethereum since the beginning of 2021 has attracted several institutional and traditional investors. Unlike BTC, Ethereum is the largest and most popular open-ended decentralized software framework. Innovations are coming up for the platform, and it is evolving to adapt to users’ current needs. Let’s see whether Ethereum is a good buy over Bitcoin and Cardano now. 

Pros Of Investing In Ethereum 

One of the many reasons to buy ETH over Bitcoin is its ability to host multiple applications along with Ether tokens. The Ethereum network is the foundation for several successful applications like non-fungible tokens (NFT) and decentralized finance (DeFi). NFTs aim to change the way digital items are bought and sold, while DeFi is revolutionizing the banking sector. The increasing popularity of DeFi, dApps, and NFT will eventually drive the price and value of Ethereum in the future. 

Yet another advantage of investing in ETH is the launch of its much-awaited upgrade. The Ethereum 2.0 will enhance the network functionalities, change the way transactions are verified, and reduce gas fees. The upgrade will also increase the network’s scalability and security, giving ETH an advantage over Bitcoin. 

Further, the transition from Proof-of-Work to Proof-of-Stake will make Ethereum more energy-efficient and sustainable compared to Bitcoin. It is expected to reduce energy consumption by around 99.5%. This will fuel the price of ETH to new heights, which is why experts endorse an Ethereum investment for good returns in the long run

The booming NFT market is also a key reason to buy ETH now. NFTs and almost all DeFi applications would require ETH as gas to pay for transactions on the network. As more users buy ETH, the token would skyrocket to new heights by the end of the year. Moreover, Ethereum is undoubtedly quicker than Bitcoin, with transactions taking seconds rather than minutes to complete. 

Cons Of Investing In Ethereum 

Ethereum does have plenty of future potentials and advanced blockchain technology, but it lacks the brand recognition or popularity that Bitcoin enjoys. As a result, Ether is not as widely accepted among merchants as BTC.

Moreover, with the development of Cardano smart contracts, Ethereum will face significant competition since it was made with a strong focus on sustainability. 

Additionally, several changes are undergoing in the Ethereum blockchain, which might result in greater volatility in the price of ETH. Earlier this year, congestion on the Ethereum network pushed the transaction fee to unbearable levels and several projects started to migrate to other networks, where transaction fees were more stable. 

Read Also: Will Ethereum Be Worth More Than Bitcoin By 2030?

Cardano (ADA)

Cardano has equal risk and reward potential for investors, which would likely make it a solid long-term investment. 

Cardano has gained attention and demand for its advanced blockchain network ever since its inception. The purported goal of the project is to provide financial services to the unbanked population, which would likely make ADA a better buy compared to Ethereum and Bitcoin. Let us see some of the advantages and disadvantages of investing in one of the fastest-growing blockchain assets in the crypto space today. 

Pros Of Investing In Cardano 

Cardano is already a Proof-of-Stake network and, this has been a significant advantage for ADA over ETH and BTC. In addition, the coin was initially designed with an environment-friendly approach, and ADA is one of the best green coins to buy now for the future. The team is also working more towards the sustainable part of the network, which might attract more environment-conscious investors. 

Although the network does not support smart contracts yet, with the upcoming launch of the Alonzo update, Cardano would become a viable competitor to Etheruem. The project also offers several technological enhancements over other cryptocurrencies, making ADA a good buy now. One significant advantage of investing in Cardano is that it aims to create a scalable, sustainable, and interoperable third-generation blockchain for developers. 

Cardano has high scalability compared to Bitcoin (almost 3-7 TPS) and Ethereum (around 10-20 TPS). Thanks to its Ouroboros Proof-of-Stake (PoS) algorithm, the network can process about 1000 TPS. Moreover, this third-generation cryptocurrency has learned from the later assets to improve on their shortcomings. Cardano has a new layered architecture to enhance scalability and security. 

Cons Of Investing In Cardano 

Where Cardano lags behind the other two cryptocurrencies is in the lack of widespread adoption. The project is also relatively new in the market, compared to Ethereum and Bitcoin, and has a significantly low market cap. This might make the coin more vulnerable to sudden market fluctuations. 

Although Cardano certainly has the potential to soar higher with continuous developments in its network, it could be a speculative investment over Ethereum and Bitcoin; especially considering its adoption rate and the time in the crypto space. 

Check Out: Why Cardano Will Skyrocket

The Bottomline 

Therefore, all crypto investments come with risks and reward factors. Accurately answering which cryptocurrency is a good buy amongst Bitcoin vs. Ethereum vs. Cardano would not be possible, as every investor has different needs and risk appetites. However, considering all the factors, these three cryptocurrencies can generate good returns over the long run. But which coin to choose would ultimately depend upon how much speculation each investor is comfortable with and their investment strategies. 

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Virtual currencies are highly volatile. Your capital is at risk.

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