Bitcoin vs Uniswap: Which Crypto Asset Should You Buy in 2021

19 Min Read
Last Updated July 23rd 2021

Bitcoin and Uniswap may already be in your investment watchlist. But which one has the better investment in 2021 and beyond?

Bitcoin remains the undisputed king of the cryptocurrency scene, but many investors feel that BTC could be reaching its peak with regards to price movement - leading many to start searching for potential alternatives to the legendary cash cow. 

Whilst we could well be entering altcoin season, it would be jumping the gun to count out Bitcoin at this stage. It has plenty of big-name backing and let’s not forget it is still the most widely accepted cryptocurrency amongst retailers and commerce platforms.

But there’s no denying that there are now far more advanced networks on the market that could represent the future of digital currency - one of which is Uniswap. Whereas Bitcoin is just a means of peer-to-peer value exchange, Uniswap offers a whole financial ecosystem, known as a decentralised exchange. It has also seen some pretty remarkable price growth in its short existence.

So which is the best investment for 2021 - Uniswap or Bitcoin? In the following comparison, we’ll take a closer look at each token and consider what many analysts have to say about their potential for price growth. We’ll also give you an overview of the technical particulars of each coin, as this may well suggest that, in actual fact, both could be worthwhile additions to your portfolio. 

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Content:

Uniswap vs Bitcoin - A Comparison Between Them

bitcoin vs uniswap

In reality, a comparison between Uniswap and Bitcoin is only really relevant from an investment perspective. There is about as much difference between the two tokens as is possible within the cryptocurrency industry. Not only do are they built on very different infrastructures, but the intended function of each token also differs. 

Of course, Bitcoin is by far the larger of the two in terms of notoriety and market cap, but the appeal of Uniswap continues to grow and there is a very real chance that its native token, UNI, could grow exponentially in the coming years. To get an idea of what all this means, we need to take a closer look at each token. 

Uniswap vs Bitcoin - The Key Differences

Here are the most important ways the two assets differ:

Background

The original cryptocurrency launched back in 2009 following the publication of Satoshi Nakamoto’s whitepaper, which outlined the concept of a completely decentralised peer-to-peer payment system. Bitcoin effectively introduced the world to blockchain technology and the potential for an alternative financial system.

One of the reasons Bitcoin has gained so much notoriety is from its staggering value increases over the years. Having started off trading at pennies, BTC had soared to a high of $1,242, which inevitably drew large attention from investors across the world. 

Whilst many have doubted Bitcoin’s viability as a payment cost over the years, it seems to have done little to slow its price growth. At the time of writing, a single BTC token is worth a staggering $57,454.95.

However, it’s worth remembering that, in the world of cryptocurrency, Bitcoin is fairly dated technology. Whilst it continues to hold the number one spot, it has drawn criticism for its problems with scalability, high network costs and excessive resource consumption when compared with some newer tokens. 

Uniswap is actually the name of a decentralised exchange (DEX) that offers traders a means of buying and selling crypto without having to go through a central broker or third party, such as is the case with popular exchanges like Coinbase and Binance. Today, Uniswap is one of the most popular DEXs in the world. 

Uniswap is able to provide such a service thanks to its technical innovations. Of course, the inner workings of the network are highly complex, but the key feature to be aware of is the concept of liquidity pools.

Whereas traditional brokers require a buyer and seller to make a deal, Uniswap encourages users on the network to stake - or loan - their crypto holdings to liquidity pools, which can then facilitate trading activity across the network. Traders pay a small fee for exchanges, which liquidity providers gain a small share of, based on the amount they have staked. 

At the time of writing, there is said to be over $7bn worth of assets locked into the Uniswap DEX.

Uniswap’s native cryptocurrency, UNI, is used as a governance token. This means that holders have the right to vote on proposed changes to the network and help steer the direction of the project. UNI can also be used to pay trading fees on the network.

Transactions and Speed

Transaction processing and speed are areas in which Bitcoin is now lagging behind some of the more innovative cryptocurrencies. If you’re considering investing in Bitcoin in 2021, this may not seem like much of an issue, but it could become more significant as the years go by. 

At this stage, you’ve probably already heard of Bitcoin mining. Put simply, this is where computers on the Bitcoin network ‘compete’ to solve complex equations and verify new blocks on the network - in other words, processing transactions. 

Bitcoin mining has drawn criticism for the huge amount of power and resources it consumes. Whilst the system is essential to ensure the network is secure and there is no ‘double spend’ of Bitcoin, i.e. the same token used more than once, compared to many later blockchains Bitcoin is seen as sluggish and has even drawn criticism for its environmental impact. 

It should be obvious now that the transaction demands of Uniswap are vastly different to those of Bitcoin. What’s important for most Uniswap users is the speed at which they can exchange tokens. 

With exchanging cryptos, the swap time depends on several factors. Of course, one is simply the network load at the time, but certain technical factors can also slow transactions down. This includes trying to exchange a cryptocurrency that is deflationary and needs an amount of ‘slippage’ increased to cover any discrepancies.

However, Uniswap also has an inbuilt measure to protect users from prices fluctuating wildly between an order being made and executed. After 20 minutes, the trade automatically expires, meaning this is the longest possible wait time for a swap to be made. 

Uniswap transactions can also be increased by users paying higher gas fees, effectively outbidding other competitors who are trying to process the same transaction. 

Supply and Demand

If you are looking to invest in Bitcoin, then hopefully you are already fully aware of the concept of supply and demand, as this is what ultimately drives price movement of a given asset. But how exactly does this work with an asset that is entirely digital?

Bitcoin has an in-built deflationary mechanism that increases the scarcity of the coin over time. We have already referred to Bitcoin mining. The computers that carry out this mining are rewarded with Bitcoin when they successfully complete a block on the network. However, this reward has been diminished over time, in a process known as halving. For example, in 2009, the reward was 50BTC. In 2013, it was cut to 25, in 2018 it was 12.5, and in May of 2020, it was halved to 6.25. The next halving is estimated to take place in 2024.

The halving means that fewer Bitcoins are being released into the ecosystem, On top of this, the total supply is also hard-capped at 21 million - this is the most Bitcoins that can ever be created. 

Whereas Bitcoin has its deflationary mechanism, Uniswap’s UNI has just the opposite - an inflationary protocol. 

UNI has a total supply of 1 billion tokens, which will be released into the Uniswap network over the course of four years. Once all of the tokens have been distributed, Uniswap will introduce an inflation rate of 2% per year in order to maintain network participation.

Uniswap has not provided details on exactly how this inflationary system will work, but it’s worth remembering that the UNI token holders are able to influence what happens within the system, so anyone considering investing in UNI as a long term investment will need to keep an eye on how things unfold. 

Uniswap vs Bitcoin: Which Is The Better Investment?

On paper, it would be easy for the uninitiated to assume that Uniswap is a much better investment than Bitcoin, as it would appear to have far more intrinsic value as the token of a highly popular exchange.

However, Bitcoin has consistently proven its worth as an investment vehicle and has never been toppled as the number one most valuable cryptocurrency on the market. As such, anyone looking to invest in cryptocurrency in 2021 might wish to consider both tokens as part of a diverse strategy. 

There are many altcoins that can claim to be more technically advanced than Bitcoin, but that doesn’t change the fact that token for token, Bitcoin is by far the most valuable cryptocurrency on the market. So the question should be: is Uniswap a better investment? To answer this, we first need to consider each token’s previous price movement, irrespective of any technical specs. 

Bitcoin Vs Uniswap: Price History

To build an idea of how each token’s price may move in future, it is first necessary to take a look back at how they have responded to market forces in the past. 

Bitcoin

It seems that Bitcoin is always at the forefront of any cryptocurrency market upswing and in many cases, BTC actually sets a trend that filters down to the rest of the market. Having traded at just pennies in its early days, Bitcoin had surged to an impressive $1,242 by 2013, making it one of the most successful investment vehicles on the planet. 

The next major upturn for BTC came in the so-called bubble that hit the crypto scene in 2017. Prices of Bitcoin surged as high as $19,783.06 before going into steady decline for much of 2018, with prices dropping as low as $3,672. However, this misfortune proved to be short-lived and by the end of 2019, BTC was back up at $7,240.

Then we come to 2020 - the year of the COVID pandemic. Like most cryptos, Bitcoin took a hit in March but quickly recovered, soaring back to over $28,800 before the year was out. Then came BTC’s record-breaking price runs of 2021, which saw successive bulls in January, February and March/April wearing BTC reached a new all-time high of $64,804.72.

Uniswap

Uniswap hasn’t been around very long, so it’s not possible to identify any long-term price patterns - especially when compared to Bitcoin. However, in its short life, UNI has seen some pretty impressive movement - in fact, it actually doubled in value after just two days of trading. 

Towards the end of 2020, prices declined with UNI trading at just under $3 at one point in December before dropping further heading into the first few days of 2021. However, things would soon change, as UNI soared from $1.17 to $19.39 in January alone. February also proved to be a successful month, with prices surging again to $29 - marking an increase of over 2370% for the year.

As if that weren’t enough, another upswing hit the crypto market in March/April, which saw the price of uni reach its all-time high of $43.67. At the time of writing, UNI has held its value reasonably well, trading at just over $40 per token.

Bitcoin Vs Uniswap: Future Predictions

A prices retrospect is a good way of gauging how a token acts in respect of the wider crypto market, but it can only tell us so much. To gain further insight into what we can expect in future, it’s always advisable to check out the technical analyses of leading crypto platforms. 

Bitcoin

There are a few split opinions on Bitcoin as of May 2021 - some analysts believe the original cryptocurrency will continue to rise, whilst others feel it may have peaked for the foreseeable future.

TradingBeasts, for example, believes that the price of Bitcoin BTC will decline around 15% by June this year, trading at around $48,596.097 before picking up slightly towards the end of summer, crawling back past $50k in September before finishing the year at a respectable $53,129.997.

Elsewhere, DigitalCoinPrice has Bitcoin soaring as high as $97,590, before a slight dip in August sends it back down to $78,845. However, the platform is much more optimistic about Bitcoin’s recovery in the latter half of the year, predicting that BTC will surge back to the  $95,707 mark and continuing to climb into 2022. 

Finally, WalletInvestor’s technical analysis gives a price trajectory somewhere in between TradingBeasts and DigitalCoinPrice. It has the price of BTC climbing fairly steadily across the year, reaching an average price of around $73,559 by December. 

Read Also: Bitcoin Price Predictions

Uniswap

Uniswap’s native token has attracted plenty of attention in 2021 and many top analysts are predicting continued growth in the months ahead. 

Coinpedia, for example, suggests that “certain collaborations and partnerships to boost the protocol might lead to Uniswap’s price surge”, predicting that UNI might reach a high of $85 before the end of 2021. 

DigitalCoinPrice is also predicting growth, if at a slightly slower rate. By the end of May, the platform expects Uniswap UNI to break the $60 barrier before a somewhat turbulent summer sees prices bounce between $53.15 and $64.96. By December 2021, UNI is expected to have stabilised at around $60k.

TradingBeasts has a more subdued Uniswap price prediction for 2021. Whilst its technical analysis still points towards growth overall, it sees UNI dropping in price going into summer, dropping to an average price of $37.96 in August. However, by the end of the year it will have regained the $40 mark, with a potential high of $50.71 in December 2021. 

Check Out: Uniswap Price Predictions

Uniswap Vs Bitcoin: What the Experts Say

It’s always worth keeping an ear to the ground for expert comments on the cryptocurrency market. Of course, there are far more opinions on Bitcoin than Uniswap, but this does not equate to its being a better investment - it is simply the more talked about token. So who thinks its a good idea to buy Uniswap in 2021?

Bitcoin

It’s rare for a week to go by without someone issuing some kind of statement regarding Bitcoin. Mike Novogratz, chairman of Galaxy Digital and long-time crypto supporter has recently said that “that existential threat of Bitcoin not being real is gone. Every institution in the world is participating and so it’s an asset class” - which lends support to the idea of BTC being far more stable than it has been in the past. 

Meanwhile, Christopher Wood, global head of equity strategy at Jefferies, is unreservedly bullish in BTC because of the “dramatic supply and demand dynamics continuing to drive bitcoin in the aftermath of last year’s halving and in the context of growing institutional ownership."

Mr Wood also said that his firm had recently allocated 5% of its portfolio to bitcoin, having reduced the allocation to gold bullion by 5 percentage point - a significant vote of confidence in ‘digital gold’.

Of course, Tesla’s Elon Musk gave BTC a boost earlier in 2021 by announcing that his firm had acquired a $1.5bn holding of Bitcoin and would now be accepting the cryptocurrency as payment for its vehicles.

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Uniswap

This all bodes well for Bitcoin, but what about Uniswap? Well, it’s fair to say the DEX has its fair share of supporters - especially with the new V3 upgrade. 

Hisham Khan, CEO of Cryptocurrencies.AI, CEX-DEX expressed his support, describing the Uniswap V3 upgrade as the “next step” in the evolution of Automated Market Makers. “Liquidity Providers will now be able to better choose where they allocate their liquidity, which will bring greater capital efficiency, while reducing slippage, further benefiting traders on the booming decentralized exchange,” he added. 

Mr Khan’s comments were echoed by Martin Köppelmann, Co-Founder and CEO At Gnosis, who commented: “The Uniswap v3 launch is one of many upgrades innovating the future of decentralised exchanges, and we hope to see the DeFi space continue to put users first and give them more control over their digital assets.”

Read Also: Is It Worth Investing in Uniswap?

Uniswap Vs Bitcoin: Conclusion

It should be fairly obvious by now that Uniswap vs Bitcoin really is no competition on the technical front - both tokens fulfill a completely different role and are not competing in the same space.

In reality, the same could also be said from an investment perspective. Whilst Bitcoin continues to fly high and offers a certain degree of stability, Uniswap’s UNI is one of the fastest-growing tokens on the market - making it a fantastic opportunity for investors to potentially see significant returns. 

Of course, neither token carries any guarantees. It’s conceivable that Bitcoin will go into a period of decline - as it has done in the past following record price surges. There are also plenty of competing DEXs out there that could hamper any Uniswap bulls. As always, investors need to acknowledge the risk involved in trading any cryptocurrency. 

Of course, whether you choose to invest in Uniswap or Bitcoin, it should always be remembered that the cryptocurrency market is notoriously volatile - many crypto novices believe that Bitcoin is a safe investment, simply because it is the bigger name.

If you’re only going to choose one coin, then it is probably better to invest in Bitcoin than it is to invest in Uniswap. However, as analyses reveal, both coins can potentially yield impressive returns in 2021 so both potentially have their place in a diversified investment portfolio. 

Bitcoin may be the winner, but Uniswap’s growth and continued popularity against the odds are certainly worthy of note and could well see the Uniswap asset emerge as a solid investment for 2021 and beyond. 

How to Invest in Cryptocurrency in 2021

If you’re looking to invest in Uniswap or buy Bitcoin in 2021 but are new to the cryptocurrency scene, then you’ll first need to find a broker that can give you access to the market. There are numerous operators to choose from, but we recommend eToro for most investors.

Not only does it have a good reputation and well-established record for providing brokerage across various sectors, but eToro has some of the best and most up to date information on the crypto market - making it ideal for the more inexperienced trader. 

eToro – The Best Platform to Buy Cryptos 

eToro have proven themselves trustworthy within the Crypto industry over many years – we recommend you try them out.

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FAQs

Should I invest in Bitcoin?

Bitcoin has seen meteoric price increases in the first few months of 2021, prompting many to speculate that it could soon run out of steam. However, most platforms are predicting growth over the mid to long term, so whether or not you invest in Bitcoin could depend on your overall strategy. 

Where can I buy Uniswap in 2021?

If you are looking to invest in Uniswap then the easiest way to do so is by acquiring a holding of its native token, UNI. To do so you’ll need a broker that lists the token. We recommend eToro for most users, as it's a highly accessible platform with a good reputation. 

Is Uniswap better than Bitcoin?

Comparing Bitcoin vs Uniswap is a hopeless task as they are completely different - both in infrastructure and objective. If you’re an investor, then both are worthy considerations for your portfolio, but Uniswap could well see bigger growth in 2021. 

Which crypto should I invest in in 2021?

The crypto market is notoriously unpredictable so no one can say what the best cryptocurrency to invest in will be. The best way to approach the market is by setting out a budget and strategy before doing as much research as possible. Always remember that, no matter how cautious you are with your picks, trading always carries risk. 

What’s the difference between Bitcoin and Uniswap?

There are numerous differences between Bitcoin and Uniswap. Most notably, the former is little more than a peer-to-peer payment system, whereas the latter is a fully decentralised cryptocurrency exchange. As such, Uniswap is a more sophisticated system than Bitcoin and arguably represents the future of cryptocurrency trading. 

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