Compared to its value in 2009 when it was first traded, Bitcoin has undoubtedly grown over the years to become a great giant cryptocurrency every investor will like to buy. In January 2021, it hit an all-time high of nearly $42,000 and today, it’s known to be the top cryptocurrency based on its value.
However, even though Bitcoin is globally recognized as the leading crypto, Ethereum has also never been a slouch. With a market capitalization of over $232 billion and sa price slightly more than $3,200, this second-leading cryptocurrency has enjoyed good support from business leaders like Mark Cuban.
The two coins have enjoyed a lot of attention in the crypto world recently that new and existing investors do wonder which is better among the two. Well, even though the two are the biggest cryptos by market capitalization, they are totally two different animals developed for different reasons.
To help you decide which of the coins to buy now, here is a quick rundown of some of the biggest things to consider about the investment outlook of each cryptocurrency.
Bitcoin is not only the first cryptocurrency that is but also the leader – no other coin comes even close. Presently, BTC has around $882 billion market capitalization and the only coin that comes close is Ethereum which only has a $372 billion market cap. So, in some ways, we can say that Bitcoin is far more valuable than Ethereum or any other crypto.
However, when considering which is better to buy between Bitcoin and Ethereum, we may need to look at some key factors investors should know about the coins. Here are some unique features of Bitcoin:
1: Bitcoin is the most popular and with the most attention
BTC has gained lots of attention among crypto investors and celebrities. Many giant companies and businesses already declared their interest in Bitcoin as some of them already proposed a move of accepting Bitcoin as a payment method across their platforms. A good example of such is PayPal.
Furthermore, the idea that in recent years, people will be able to trade in Bitcoin futures has been a great drive contributing to the wide acceptability of the asset in the crypto community.
2: Simple and very stable
Bitcoin is a decentralized currency – one that is not controlled by the Federal Reserve or any other central bank. With the recent currency devaluation happening in most parts of the world, it is obvious that people need a more stable form of currency, which is far beyond the reach of government policies. And that is exactly what Bitcoin has offered the people.
Although it is still volatile, Bitcoin has proved to be one of the most stable cryptocurrencies, and one great as a store of value. Over years, BTC has been the most consistent and best-performing investment asset.
3: Limited supply
This is another unique characteristic of Bitcoin – it has a limited supply. The coin is capped at 21 million bitcoin—that is the number that is ever going to be in circulation. That has been one of the things firing up investors’ interest in the coin, considering it to be akin to digital gold. Plus, $18.6 million bitcoin has already been mined.
This means there is only a few bitcoin left to be mined. And the rule of thumb says, the lower the supply of any coin, the more the demand. You sure get that gist!
Many times when people ask whether to buy Bitcoin or Ethereum, they often fail to realize the two are not exactly the same. The motivations behind the two coins are not the same. It is more like comparing gold with electricity. While the two are both valuable, they don’t serve the same purpose.
1: Ethereum has a different goal
Ethereum is a cryptocurrency that on its own, operates as a decentralized network on top of which other applications can be built. The applications built on it have the potential to completely revolutionized finance and technology in the few years to come.
2: Ethereum has more use case
Unlike Bitcoin, Ethereum does a lot more than just enabling peer-to-peer transactions. While Bitcoin is great for storing wealth, Ethereum was created to power and enable other applications on its network. Ethereum is able to host a wide range of blockchain-based solutions including Dapps (decentralized apps). That way, we can safely say that Ethereum expands the use of blockchain from simple value transfer to more complex use cases.
3: A fundamental change in the way clocks are created
Ethereum network is currently undergoing an upgrade whose hallmark is changing the way blocks are created on the network. Instead of the regular way where miners with the most computing power have the greatest advantage of successfully creating new tokens, the right now goes to users with the largest ownership stakes.
With the new upgrade, Ethereum will no longer use the proof of work consensus mechanism like it is with Bitcoin but will instead use the proof of stake mechanism. That means less energy consumed for mining while removing the costs of buying sophisticated hardware for mining.
4: More development
Another catalyst fueling the acceptance of Ethereum over Bitcoin is the growth of decentralized finance (DeFi). The concept literarily removes middlemen and intermediaries like exchanges and brokerages in crypto transactions.
In the past weeks, the concept has enjoyed newfound mainstream relevance and acceptance and many investors are already taking advantage of it.
So Should You Buy Ethereum or Bitcoin?
Well, this completely depends on your risk profile. Both BTC and ETH are poised to perform well over time as more people open up to cryptocurrencies globally. Bitcoin is presently more popular and stable than Ethereum. But as with most investments, chances are that the increased risk associated with Ethereum brings with it potential for higher rewards.
Furthermore, both BTC and ETH have sprinted past what they used to be in the last decade. It is now time for investors to consider taking both coins more seriously. If you have the strength, you can buy both. Moreover, you can later exchange either of them if you feel the need. You can easily buy ETH for BTC via any reliable exchange.
For instance, if you have BTC in your wallet and looking to buy some ETH, you can use a platform like SimpleSwap to easily change your BTC to ETH.
Exchanging BTC for ETH
There could be different reasons to change your BTC to ETH. You may decide to change your investment plan or test out new waters with Ethereum. Whatever the reason, changing BTC for ETH is not difficult at all. In a few steps, you will be done with it.
For instance, with SimpleSwap, it will only take about three steps and less than 3 minutes to get it done. Choose the crypto pair and the amount of BTC you would like to exchange, enter the recipient’s Ethereum address, and wait for your ETH to be sent.