Bitcoin vs Ethereum: Which crypto is a better buy?

Bitcoin vs Ethereum: Which crypto is a better buy?

By Crispus Nyaga - min read

Bitcoin and Ethereum are the two biggest cryptocurrencies in the market with a combined market cap of over $1.2 trillion. The two coins have also generated substantial returns to their shareholders in the past decade. In this Bitcoin vs Ethereum piece, we will identify the one that is a better investment for long-term investors.

Bitcoin vs Ethereum

Bitcoin and Ethereum are blockchain projects with different goals. BTC was designed as an alternative currency while Ethereum was built with smart contract capabilities. As a result, many developers have used Ethereum’s platform to build their decentralized products like Aave and Uniswap. 

In terms of performance, the two have had spectacular returns in the past decade. And a closer look shows that a close correlation exists between the two. Bitcoin has risen by about 18,700% since 2015 while Ethereum has gained by over 22,000% in the same period. This means that Ethereum has been a better investment than Bitcoin.

The case for Bitcoin

There are several reasons why many investors believe that Bitcoin is a better investment than Ethereum. First, as the first cryptocurrency on record, Bitcoin has a better brand name than Ethereum. This explains why many institutional investors prefer holding it to Ethereum. Second, it has a limited supply, which means that it will keep getting rare over time.

Third, BTC is viewed as digital gold, which explains why many people invest in it. And finally, Bitcoin is an autonomous organization that is managed by the community. Ethereum is different because of the role that the Ethereum Foundation plays.

The case for Ethereum

Meanwhile, when comparing Bitcoin vs Ethereum, many inventors believe strongly in Ethereum for several reasons. First, they believe that Ethereum has more use-cases than Bitcoin. 

For example, the platform has been used extensively to build decentralized applications in the DeFi, metaverse, and NFT industries. Examples of leading apps in Ethereum are Uniswap, OpenSea, and Aave. Therefore, as these industries grow, the Ethereum price will keep rising.

Second, Ethereum is addressing its carbon footprint issue by transitioning from a proof-of-work network to a proof-of-stake platform. This process is going on and analysts expect that the merge will happen in the third quarter of 2022. Therefore, Ethereum will be more attractive to ESG-focused investors.

Third, Ethereum has additional features that Bitcoin lacks. The most important one is staking, which happens in Ethereum 2. As a result, it is possible to earn money by simply buying and holding the coin.

Therefore, because of these features, in my opinion, I believe that Ethereum is a better investment than Bitcoin.