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Bitcoin and Ethereum rank #1 and #2, respectively by market cap
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Bitcoin is a digital version of currency while Ethereum powers smart contracts
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Both cryptocurrencies are attractive in a bull market
Bitcoin and Ethereum rank as the biggest cryptocurrencies. To an investor, deciding which one to buy can be confusing. However, it should be easy if you understand the role that each plays in the crypto evolution.
Bitcoin (BTC)
Think of Bitcoin (BTC/USD) as a digital version of your local currency. The biggest cryptocurrency is, however, different since it is based on a peer-to-peer network. It is decentralised, hence distinct from the conventional currencies, which are controlled by states and national central banks.
As money evolves and digitisation takes over, Bitcoin could become the new form of money. That will see it become a means of payment and a store of value.
Invented in 2009, BTC has immensely grown in value. In 2021, the cryptocurrency tapped an all-time high of above $68,000. That compares to a price of just $500 in 2016 before the cryptocurrency embarked on a sustained surge. Bitcoin now trades above $16,000 after a sustained bear market this year.
Where to buy BTC
Ethereum (ETH)
Ranked as the second largest cryptocurrency, Ethereum (ETH) is viewed as the epitome of smart contracts. Like Bitcoin, Ethereum is decentralised and acts as a store of value, means of payment, and collateral.
Nonetheless, unlike Bitcoin, which is a dedicated form of digital money, Ethereum aims to power smart contracts, dApps, NFTs, and DeFi. It is also relatively newer compared to Bitcoin since it was created in 2015.
Ethereum price also had its fair share of strengths, reaching nearly $4,800 in 2021. Ethereum traded at less than $10 in 2016 before the start of a sustained climb. It now trades at $1,200 in a bear market. Investors anticipate that a recent move from proof of work consensus to proof of stake could power Ethereum to previous heights when the bull market returns.
Where to buy ETH
Final verdict
Bitcoin and Ethereum are very strong cryptocurrencies. Their price movement is almost similar, making it difficult to choose one over another. The selection of which cryptocurrency to invest in depends on what you like about each. The technical outlook and fundamentals emerging from each can also help when making a decision.