While we have so many cryptocurrencies, when it comes to the most popular option, we have Bitcoin topping the chart, followed by Ethereum. Bitcoin enjoys the perk of being a pioneering cryptocurrency, while Ethereum has the dual benefit of being a cryptocurrency and a platform for developing a decentralized application. So, how do you choose the best one of these?
Bitcoin (BTC) made its debut earlier in the asset class in 2009 and was the best-performing mainstream investment in earlier times. However, other digital currencies joined in gradually, and Ethereum (ETH) debuted in 2015. Bitcoin hit an all-time high of$69,000 in2021, while Ethereum reached a high of $4,891.
About Bitcoin (BTC)
Bitcoin is a commodity just like gold or a store in value, and its platform is more or less evolved and set. Bitcoin dominates the cryptocurrency market and accounts for almost 46% of the total value of the crypto market. As compared to Ethereum’s $400 billion, the market cap for Bitcoin is $1 trillion. It remains the first choice among big corporates as Bitcoin is most likely to outperform Ether in a downturn.
There are certain risks involved in Bitcoin, even though thousands of businesses accept it.
Risks involved
- Highly speculative at this point
- Bitcoin transactions are energy-intensive
About Ethereum (ETH)
Ethereum or Ether is one of the most actively used blockchain technology for verifying and recording transactions. Investors often choose Ethereum because of its continued development and growth-type investment. The blockchain platform functions like the Android app store or Apple store and is currently going through upgrades. Thus, the platform is still evolving, unlike Bitcoin.
Despite having major advantages due to its blockchain technology, there are some risks involving Ethereum.
Risks involved
- No guarantee about the wide adoption of Ethereum
- Isn’t as popular as Bitcoin
Ethereum and Bitcoin are the two major cryptocurrencies but are different in their internal dynamics. Investors must look at their preferences and trading styles and understand the internal dynamics to decide which one of them to invest in.
Most traders start with the top two cryptocurrencies, Bitcoin and Ether, to make good investments. The value of Bitcoin has almost doubled while the Ether has quadrupled when one compares the gains. Today, it is
Ether seems to have far outperformed Bitcoin. However, there are no promises made as to which of the two blockchains will prove to be more revolutionary.
Here are a few pointers to keep you on the right track:
- Choose coins that enjoy greater support from communities and have more followers.
- Look for the price movement of both in the last couple of weeks and months to get some indication.
- Get info about the people behind the cryptocurrency and invest if there is a inpany with a good leadership team.
- The underlying technology is another important factor to watch out for Ethereum technology. For example, it is popularly used in the banking and financial sectors.
- Study Tokenomics or Token Economics to know how the cryptocurrencies will perform in the overall ecosystem
Many market watchers warn of a potential bubble once the prices go down, and cryptocurrencies can take a hit at any time. Financial experts suggest investing in both to maintain a healthy investment portfolio and minimize the risks. The two critical factors to look at are how the coins would be distributed and used and their quality. These two factors will affect their value and performance.
Over the past few months, the price of both Bitcoin and Ethereum has surged, despite the massive downturn in the economy. Now that the cryptocurrency prices are falling, this is the right time to invest in Bitcoin or Ethereum as they are a lot more affordable.
Bitcoin or Ethereum, one should know that investing in cryptocurrencies is a risky trade. Hence, one must study the coins, the underlying dynamics, and the government’s regulations to analyze the risks before investing. As an investor and trader, one must know that cryptocurrency is a high-risk investment, and if you are willing to bear the high levels of risk and volatility, you can go ahead and invest in either of the two or both.
Final thoughts
Whichever option you pick, choose a trustworthy crypto trading platform like Bitcoin Era and do so after doing your research to make the right decision and maximize your chances of profits and minimize the risks.
FAQs
Bitcoin is a decentralized digital currency that enables peer-to-peer transactions without the need for intermediaries such as banks or governments. It is based on blockchain technology, which allows for secure and transparent transactions.
Is Bitcoin legal?
The legality of Bitcoin varies by country, and some countries have banned it altogether. In most countries, Bitcoin is legal, but it is important to check the laws in your country before using it.
Can Bitcoin be traced?
Bitcoin transactions are recorded on the blockchain, which is a public ledger, but transactions are anonymous. It is difficult to trace Bitcoin transactions back to individuals.
Can I use Bitcoin to buy goods and services?
Yes, Bitcoin can be used to buy goods and services from merchants that accept it as payment.
How do I buy Bitcoin?
Bitcoin can be bought from cryptocurrency exchanges or directly from other individuals using peer-to-peer marketplaces.
Can I lose my Bitcoin?
Yes, Bitcoin can be lost if you lose access to your digital wallet or if you send bitcoins to the wrong address. It is important to keep your digital wallet secure and to double-check all transactions before confirming them.
