Deciding to make the leap into cryptocurrency investment is not a step that is taken lightly. After all, we have all seen the news stories about how volatile the market can be, and anyone who is making that leap needs to be confident, knowledgeable, and flexible.
Of course, you wouldn’t make any investment without doing your legwork first, and although Bitcoin has long been the most widely discussed form of cryptocurrency, there are others out there that have been making significant strides forward in the last few years. The second-largest cryptocurrency out there is Ethereum, but if you want to know which one is better for investment, then it’s important to understand what sets them apart.
A Little More About Bitcoin
Bitcoin was launched back in 2009, and it was founded on the idea that there could be an online currency that was not overseen or controlled by governments or other central authorities. In other words, it’s a decentralized currency, which will be mined until the limited supply is all finished. Thanks in part to its longevity, Bitcoin has earned its reputation and is now widely used and understood. Its status as a truly global currency has also helped to keep it moving forward, and its continued association with figures like Elon Musk helps to cement its position as a currency of the future.
A Little More About Ethereum
While Bitcoin was founded as a currency, Ethereum is a little different. Ethereum is a software platform, launched in 2015, aimed at allowing contracts and apps to be created and run without any fraud, downtime, or interference from third parties. Ether is the currency that is used on the Ethereum network, but it can also be traded just like any other cryptocurrency. The big hurdle for Ethereum was attracting the interest and investment of major corporations, which it achieved most notably with Microsoft. You can see how much it would cost to buy Ethereum soar in the recent months due to the growing use case of Ethereum.
So, Which One Is Better?
Well, as with any investment, the question is a little bigger than “is x better than y?” The cryptocurrency market is always going to be prone to fluctuations, some of which tend to be dramatic, but one of the main advantages of investing in Bitcoin is that it continues to be more and more widely used. As Bitcoin becomes more commonplace, the risk in investing in it would seem to go down. When it comes to Ethereum, it is important to remember that its primary goal is not the same as Bitcoin’s.
The purpose of Ethereum as a cryptocurrency is to keep the Ethereum platform growing. If you are thinking about investing in it, you are essentially starting your confidence that more and more companies and businesses are going to invest in their platform and blockchain technology A quick glance at the news will show you that this certainly seems to be the case right now, as billionaire investors have helped to drive attention to it on platforms such as YouTube, and thus boosting its price.
You should also consider that Bitcoin is built on a deflationary model, which means that its supply is limited – 21 million to be exact. It’s value will only go higher the more people adopt Bitcoin and the more scarce the supply becomes. Ethereum, on the other hand, is on an inflationary model. There can be no limit as to how much Ether is minted and its value is dependent on how many institutions use the Ethereum blockchain.
The other deciding factor is the amount you want to invest and how much crypto you want to hold. At the time of writing, 28 Ether equals 1 BTC so if you want to hold more crypto you should go for Ethereum.
As we previously stated, although these are both cryptocurrencies there are clear differences between the two, and deciding which is the better fit for your investment portfolio may well depend on how you feel about their core goals. One thing is for sure: neither Bitcoin nor Ethereum are going anywhere.