Bitcoin Vs. Ethereum: Which Is A Better Investment?

image of bitcoin coin and ethereum coin

Investing in cryptocurrencies is one of the best ways to increase your wealth. With more people embracing crypto, their value in the market keeps rising.

The pressing question is, what is the best cryptocurrency to put your bet on? It is clear that Bitcoin and Ethereum are two of the best cryptocurrencies; they also have the highest value and are safe bets for investors.

But which is the best? Which will give you more ROI? Which is safer? Is Ethereum a better investment than Bitcoin? Should I invest in Bitcoin or Ethereum? All that will be answered in this article.

The Analysis Of Bitcoin

image of a Bitcoin coin among other coins

Bitcoin is a decentralized digital currency that can be sent between users without an external link. Today bitcoin is the most known digital currency globally; you may have heard more about this asset than Ether(Ethereum).

This cryptocurrency was created in 2008 and launched on the market in 2009. It was the first virtual currency to hit the market, and much of its fame is thanks to that.

Bitcoin completely revolutionized the financial world, bringing a new virtual monetary system to life. At first, this new system’s characteristics were difficult to understand and trust, but little by little more investors are coming on board.

Today Bitcoin is the cryptocurrency system with the most investors globally, and it is the most sought after. Also, every cryptocurrency that exists today starts from the same technology that handles Bitcoin and adds other elements to have a better impact on the public. 

One of the main reasons for the existence of Bitcoin is to establish a much safer and faster financial system than any that has ever existed. It intended to create a completely accessible system for any user, as long as they had access to the network.

The Technology

Bitcoin used for the first time the technology defined as blockchain or chain of blocks. This allows all your operations to be very secure. 

All the data that make up this system are interrelated. At the same time, they are arranged in blocks to be processed. Also, this system allows each user to have complete control of their data and the site where they store their cryptocurrencies.

That is, you do not have to trust all your personal information to a server that stores your data, and that can be hacked. 

Simply put, Bitcoin has achieved its goal and continues to do so.

This system is not only a great reference within the universe of cryptocurrencies, but it also represents a point of innovation for the world’s economy.

The Growth of The Bitcoin

An image showing the growth of the Bitcoin since it came into existence

The rise of Bitcoin has not been easy because it is the first virtual currency. It had to earn investors’ trust towards its platform and trust towards cryptocurrencies in general.

As I said earlier, the launch of Bitcoin was made in 2009. At this time, the cryptocurrency was only worth a few cents on the dollar.

It was not until 2011 that the Bitcoin unit started to be worth $1. Yes, Bitcoin spent almost 3 years worth only pennies. In 2013 this coin took a giant leap, reaching a value of $1,200. Of course, this was not linear.

During 2014 the price of this cryptocurrency was varying between $200 and $630, without ever reaching a point higher than $1,000. This behavior was maintained throughout 2015 and 2016.

In 2017 this story changed radically, a Bitcoin already cost more than $1,000 in January, and by mid-November, it cost $8,300.

This streak continued until the beginning of 2018. In January 2018, the value of this coin was worth $17,250. However, as of that month, the price has fallen to the current value of $7,500. As of April 2021, the value of the coin was $57,057. That’s a lot of growth over the years.

The Analysis Of Ethereum

An image of an Ethereum coin

Ethereum is more than digital money. It is also an open-source blockchain for conducting transactions, known as decentralized digital applications (dApps) and smart contracts.

Ethereum is a system created in 2014 with the idea of ​​revolutionizing the world of cryptocurrencies and the digital world in general. Its creator, Vitalik Buterin, is a 24-year-old Russian programmer who has been working and writing about this type of system since 2011.

The Ethereum platform seeks to serve as a means to decentralize the web and allow all its users to have true virtual privacy in every way.

Surely you are used to using social networks, digital banking systems, and any number of services that are offered online. However, all these elements usually take your data, which though not openly available to the public, is vulnerable. Have you ever given a thought to the amount of personal information you entrust to the web?

That is what Ethereum wants to avoid.

What Makes Ethereum Special

What makes Ethereum unique as a platform is that it uses blockchain technology to develop smart contracts.

A smart contract is a computer program that works on the principle of “cause and effect” between two or more parties.

In other words, it is a digital bargain that ensures that when a previously agreed action is performed or fulfilled, the consequence for this action will be released. These types of programs represent a significant innovation over the agreements in general.

Ethereum is the pioneer platform to generate this type of technology developed with blockchains. Of course, the impact it has goes far beyond the realm of cryptocurrencies.

The Platform vs. The Coin 

Ethereum is a system that works with blockchain technology. Additionally, this platform has a token that can be traded and has value within the system. The name of this token or cryptocurrency is Ether.

Of course, the platform and the token are closely related. However, they are not the same. Just like bitcoin is used to address the coin and Bitcoin for the protocol, software, and community.

The Growth of Ether

An image showing the growth of Ether since it came into existence

Continuing with the analysis of Ether as a cryptocurrency, we must touch on a crucial issue, its value. In the case of Ether, its initial price in 2015 was only pennies on the dollar.

By 2016 Ether reached a value of $14, but by December of that same year, the coin closed at only $8. It was in 2017 that Ether became one of the strongest digital currencies. Ether reached $800 and closed in December 2017 at $736.

In January 2018, Ether reached a price of $1,400. However, it quickly fell the next month to $470. Its value as of April 2021 was around $2,100.

Upsides Of Bitcoin

Bitcoin is recognized worldwide for being the mother of all cryptocurrencies. This has brought it more advantages than disadvantages, and you must be aware of it all if you’re to invest in crypto.

Trust & Growth

Being the pioneer and the basis for the birth of all the cryptocurrencies that exist today makes the confidence of its investors quite strong. Of course, that in turn greatly influences its price.

Despite momentary drops in its value, Bitcoin remains the most expensive virtual currency in the entire market.

Most South After

It is worth mentioning that Bitcoin is the best-known cryptocurrency in the world and the most sought after. Bitcoin is the cryptocurrency with the highest level of commercial acceptability in the world.

As a result, there are so many platforms to trade on. In fact, some platforms are exclusively dedicated to transactions with this cryptocurrency.

So if you need or are looking for a greater level of ease to dispose of your money, perhaps Bitcoin is what you are looking for.

Downsides Of Bitcoin

While it is true that the advantages of this platform are very evident, there are a couple of aspects that represent the disadvantages of Bitcoin with respect to its competition.

First of all, we have the point of innovation that all recent cryptocurrencies are including on their platforms. It is true that Bitcoin focuses only on the financial aspect and does it wonderfully.

However, the new cryptocurrencies are acquiring new utilities in different aspects. This makes Bitcoin, in a certain way, begin to fall behind.

The second disadvantage you must consider is that being the most expensive cryptocurrency, the variation in its price is larger.

An example of this happened in January 2018; both cryptocurrencies were at a high point in their value. Ethereum was hovering around $1,000 while Bitcoin was at over $17,000.

When the price drop came, they both lost about 50% of their value. However, the people who had Bitcoins felt much more the loss of 50% of their coins’ value ($8,500 for each one) than the people with Ethers (whose 50% was equivalent to little more than $500).

Of course, when Bitcoin rises in price, all its investors benefit greatly. Still, the risk may be higher.

Upsides Of Ethereum

In the case of Ethereum, the advantages are many. 

More Than a Coin

Above, I mentioned that it was designed to be much more than a cryptocurrency system. Right here lies its greatest advantage. Many projects are built on it, and there are many ways to benefit from the protocol.

A Valuable Coin

Do not overlook the fact that Ether is currently one of the most valuable cryptocurrencies. Yes, it’s still not up to the price levels of Bitcoin, but if you compare the growth per year of both assets, you can see that in 3 years, Ethereum has reached a higher percentage of growth than that of Bitcoin in its initial years.

Everything indicates that the value of this cryptocurrency will continue to advance steadily. Some say that by the end of 2021, its price will be higher than $4,500.

Downsides Of Ethereum

The strengths of this system are greater than its weaknesses. However, there are certain weaknesses that you must take into account.

One fact that can be considered a disadvantage compared to its competition is the trajectory of the platform. Even though Ethereum is a completely safe and reliable platform, the reality is that Bitcoin has more experience in the market.

This has a very massive effect on the trust that people place in the platforms.

Thus, many people still prefer to invest in Bitcoin because that is the leading cryptocurrency in the market today.

The Main Differences Between Bitcoin And Ethereum

Bitcoin and Ethereum differ not only when looking at the exchange prices. The technology behind the cryptocurrencies also shows fundamental differences.

Ethereum is more than just a cryptocurrency. Secondly, Ethereum is a platform for developing decentralized apps using so-called smart contracts. These are computer protocols that, among other things, map contracts or technically support the processing of a contract. 

Also, the Ethereum blockchain works much faster than Bitcoin’s because it uses a different scaling method. Ethereum transaction speed or block time is just seconds, whereas Bitcoin’s is minutes. 

Furthermore, Ethereum can be generated with less effort. The manufacturing process requires significantly less computing power and thus consumes less electricity.

Bitcoin Or Ethereum: Which One Is A Better Investment?

Considering the advantages and disadvantages of both digital currencies, the final decision is up to you and what you want to do with your cryptocurrency.

I have to admit that both platforms are very good and have incredible potential. They are two of the most important virtual currencies in the world.

My recommendation is that you directly analyze your budget before starting to invest in any of them. To help you even further, here are reasons to invest in either or both.

Why Bitcoin Is A Good Investment

  1. Bitcoin is a simple platform. This is simply a platform that offers tokens that vary in price according to the trust of its users. If you are only interested in investing in a secure cryptocurrency, Bitcoin is undoubtedly the best option.
  2. The bitcoin is the best received worldwide in terms of cryptocurrencies. Thanks to the great acceptance that it has had for being the first cryptocurrency to hit the market, more payment methods include Bitcoin as one of their options.
  3. High Value. One major reason to invest in Bitcoin is that it has a high value. That could grow even more in the coming years; if you buy bitcoin worth $8,000, it could become $17,000 or even exceed it in a short time.

Why You Should Invest In Ethereum

  1. You want more than a coin. With smart contracts, Ethereum 2.0 bringing more innovations, and more, there are lots of possibilities.
  2. More affordable. Another factor that can drive you to buy Ethers is the current unit cost of this cryptocurrency. Today, an Ether cost on average $2,100, which is cheap compared to the value of a Bitcoin (almost $58,000).
  3. Astronomical growth. The value of this cryptocurrency rises fast. This means that in a matter of months, the Ethers you can buy today for less than $2,000 could cost much more than that in a few months or years.

Conclusion

If you still cannot decide between investing in Bitcoin or Ethereum, here’s some good news; you don’t have to do it!

Ethereum was never intended to replace Bitcoin. So instead of viewing Bitcoin and Ethereum as direct competitors, it is worth thinking of these virtual currencies as complementary platforms with the potential to support very different aspects of a digitized financial economy.

Invest in both!

Get exclusive insights

Get exclusive insights that are only for the Passive Streams community

About the author

Leave your comment

Leave a Reply

Subscribe

Sign up for weekly tips on how to make free money.