Bitcoin and Ethereum’s rivalry increase every day and especially this year, each crypto is fighting for the top dog position.
Their prices have been soaring in such an impressive manner. Bitcoin has gotten four times more valuable in the past 12 months while Ethereum has gained 1000% in the same period. Their market caps are still far apart but Ethereum is trying to catch up. Bitcoin’s market cap is currently at $616 Billion and Ethereum is almost at 50% of that with it being at $285 Billion.
Ethereum has been stealing Bitcoin’s spotlight over the past few months. It has so many advantages over Bitcoin at the moment. Mike McGlone, Bloomberg senior commodity strategist, wrote in his latest report that Ethereum had the benefit of diversification. According to Bitcoin Digital, the latest trend shows Ethereum’s gaining market steadily over Bitcoin. The leading indicator being the 50% mark in terms of market cap.
McGlone further wrote that even though both Bitcoin and Ethereum have bullish underpinnings, the usage of Ethereum keeps soaring and Bitcoin’s only attribute remains dormant to just being a store of value.
What contributes most to Ethereum’s attractiveness is the popularity decentralized finance (DeFi) has gained. In DeFi, people use crypto technology to generate bank products like loans and insurance and then build them on top of Ethereum’s blockchain.
The NFT craze has also increased tenfold. The advantage it holds is that users can easily sell their digital art, memes, YouTube videos, and many other unique pieces through the Ethereum blockchain. That’s a major boost to the Ethereum piece increase.
Ethereum vs Bitcoin
Ethereum might be strongly coming after Bitcoin’s spot but there are still some major differences between the two. Ethereum enables software developers to build apps on its network. Such a thing is impossible in the Bitcoin sphere.
NFTs, digital assets which represent ownership of rare virtual items such as art and basketball cards, are based on the Ethereum network.
Both Ethereum and Bitcoin use so much power when their coins are being mined and when processing transactions. Ethereum took a step forward and is now going through upgrades that will allow faster transactions and thus reduce the power used to process transactions.
After Bitcoin, Ethereum is the next preferred crypto by institutional investors. This places Ethereum in such a good position in the crypto scene as it gains more popularity and its price rises as the institutions pump real good money in their investments.
Stephen Isaacs of Alvine Capital thinks that Bitcoin is in a bubble that will burst as experts pointed out the risks it poses to the environment and the regulations it is facing from some governments.
Which coin is better to invest in?
No one can determine for you the better cryptocurrency for you to invest in. This is your money you should do tons of research on how the market behaves. That way, you get in the business with an open heart and with knowledge on how things go for investors.
In terms of the better coin to invest in between Ethereum and Bitcoin, they both have such great things about them.
Even though Bitcoin is currently experiencing its worst price dump yet, it still is a good investment. Bitcoin’s supply is scarcity and that factor alone places it in a good position. The rarity alone puts Bitcoin in the same range as gold. The maximum supply of Bitcoin is 21 million and 18.5 million of it is already in circulation. It, therefore, stands out as a good store of value.
The dump Bitcoin is experiencing right now is not so attractive to newbies. Over the past few weeks, Bitcoin has been receiving a torrent of bad news. Elon Musk’s company no longer accepts it as a form of payment, China banned cryptocurrency trading and usage in the country, and even the former US President Donald Trump told Fox Business earlier this week that Bitcoin “seems like a scam” that “takes the edge off the dollar.” The Biden administration has also unveiled plans to impose heavy taxes on Bitcoin citing that the crypto market lacks regulation. Bitcoin is currently below the $32,000 mark.
When Bitcoin falls it takes the other cryptocurrencies with it and so Ethereum is also plummeting. Investors are still very hopeful about Ethereum as NFTs and smart contracts still gain more popularity each day. The altcoins market cap is already at 50% of Bitcoin’s worth and in a few years, it might be much closer to Bitcoin’s.
Ethereum aims to create infrastructure for an internet that will not be maintained by any single authority. Bitcoin is too limited in functionality and so Ethereum will be more preferred by developers and users who want to use it for something more than just a transactions network.
These two cryptos promise to test all the emotions investors have in terms of prices and speculations around them soon. One has to invest in what they feel most comfortable with and after that learn how to practice patience because of the volatility that’s experienced in the market.