8 months ago
Almost 11 years after the first digital coin was mined, investors are still very interested in cryptocurrencies. And the most prominent names are still Bitcoin and Ethereum. But recently, the market’s sentiment is tilted towards one of these cryptos. Which one? Answers below.
In the beginning, there was Bitcoin. It was first traded in 2009 for the price of only $0.01. We all know what happened next.
At its peak, one bitcoin was estimated at above $20,000 (2017). The markets settled down since that peak, but the prices are still fluctuating upwards.
Ethereum was introduced in 2015 at $2.83 per coin. In a little under three years, you couldn’t buy an ethereum coin for less than $1,400.
Bitcoin and Ethereum are the two biggest cryptos by market capitalization – but that’s the only similarity you can find between the two.
But let’s set aside the history lesson for now and delve into the more pressing question:
Should you invest in Ethereum or Bitcoin in 2021?
Let’s start with the basics:
What Is Ethereum (ETH)
So basically, Ethereum is a technology that enables you to send cryptocurrency to a third party for a small fee.
Ethereum was invented by 19-year-old Vitalik Buterin back in 2013. Buterin set his mind on building an open-source, programmable blockchain. This blockchain allows you to not only use digital money without the need to work with a bank, but it can also be used for a lot of different digital assets. Even Bitcoin!
More than 1,900 different cryptos are floating out in the ether of Ethereum, but the digital coin that is initially generated by the Ethereum platform is called Ether. And it can be bought at coin exchanges just like his older brother, Bitcoin.
But that’s about the only similarity Ethereum and Bitcoin have. There are many technical differences:
There are more differences between the king of crypto and its rival, Ethereum. But for now, let’s focus on what’s really interesting:
Should You Invest in Bitcoin or Ethereum?
When it comes to financial investment, choosing between Bitcoin and Ethereum is like choosing between two stocks from entirely different sectors. There is much more activity around the Ethereum platform because it serves so much more than just accounts.
One thing that all crypto investors agree upon is that Bitcoin is a more solid buy than Ethereum.
There are higher chances the world will adopt and include Bitcoin in mainstream financial portfolios. Ethereum is still a shot in the dark.
So, in the long run, Ethereum is a less safe bet than Bitcoin. But what about quick wins?
Ethereum is the flashy, interesting coin of the pack. There is so much development going on in the Ethereum network, that the market analysts just can’t take their eyes off it.
It seems like Ethereum becomes the standard for distributed computing, meaning the coin’s value will just keep rising in the near future.
The mining difficulty of Bitcoin, coupled with Ethereum’s fast move into a proof of stake chain, makes Ether seem like a more attractive investment.
But the best way is to diversify like the big fish. For example, First Block Capital, Canada’s first registered cryptocurrency investing firm, owns funds that contain 37% Ether, 51% Bitcoin, and 12% Litecoin.
Whatever direction you choose to go, make sure you keep an eye on your positions or use an automated-trade algorithm because these coins move faster than traditional currencies.
The Future of Ethereum
The minds at the Ethereum Foundation have been working hard for quite some time on releasing an upgrade to the network. This upgrade is called Ethereum 2.0 (to Eth 2.0), and it is undergoing final tests before the big launch.
According to the foundation, the Eth2 network will process more transactions in less time and under reduced energy consumption, while maintaining a higher level of security than ever before seen. It is a huge improvement that will challenge the other, more traditional blockchains on the block.
But Ethereum 1.0 will, nonetheless, remain active and separate from its younger brother. The 2.0 overhaul will be happening on a completely different blockchain. ETH holders will be able to earn interest on the new network, making the crypto even more promising for the next couple of years.
This is the first time a blockchain of this proportion transitions into a new decentralized network while keeping the previous one active and running. The entire financial world is anticipating the Ethereum 2.0 launch, and you should expect some significant price fluctuations when the time comes.
Ethereum is a fascinating crypto, generated by a one-of-a-kind blockchain ecosystem. It’s a much more challenging trading asset than the Bitcoin – but if you have a taste for it, it can yield profits both on a BUY or SELL position.
Brian E. Murphy