When people talk about cryptocurrencies, which ones come across their minds in the first place? Of course, Bitcoin and Ethereum – two top runners, two top dogs that always compete for the market dominance.
With Satoshi going MIA and Vitalik, quite the contrary, being proactive, Ether has often spurted into the lead in terms of innovation and investment potential, especially in the summer of 2020 when DeFi had its big moment. However, the urge to compare these two coins still remains.
So what are the differences and similarities between them two and which ones are good for what?
Bitcoin vs Ethereum: differences & similarities overview
When Vitalik started developing his project back in 2013, he set it to be a blockchain platform complimenting Satoshi’s network, so both Bitcoin and Ether have a lot in common.
They are decentralized, traded on top of most crypto exchanges and neither issued or regulated by a central bank or any other institution.
On the other hand, there are many significant differences that pull two projects apart, and one of those differences is that Bitcoin was developed with the focus on money or, in other words, a store or value, while Vitalik aimed to create a decentralized platform for apps without any downtime, fraud, control, or interference from a third party.
So, yes, Bitcoin started the crypto ball rolling offering a radical new form of digital money, but Ethereum has mostly utilized Bitcoin’s underlying technology, blockchain, in order to run smart contracts and applications on top of it.
Over the course of time, the platforms grew more different. Satoshi’s coin slowly turned into a hedge against inflation, especially in march 2020, while investing in Vitalik’s token has been investing in an open Internet and the rise of decentralised applications.
So, should you invest in Bitcoin or Ethereum?
It’s always better to make clear that this is not financial advice. There is no magical button you can push and make out like a bandit. However, you can consider a few important things before investing in either Bitcoin or Ethereum.
What is your investment goal?
While talking about Bitcoin, you most likely invest into a value of the coin hoping that some time soon the price will soar even higher. It’s widely expected to break $20,000 soon.
As for Ethereum, it’s arguably a more stable asset that doesn’t skyrocket to the moon as fast as Bitcoin. But while investing in it, you invest into the core value of the project, possibly hoping that Ethereum with its decentralized-platform-for-everything approach will change the world some day.
What is your investment horizon?
For Bitcoin, a one-year time period is probably a good way to go, since the coin’s value changes like clouds in the sky. With a one-year investment horizon, there’s no need to panic if the price suddenly drops like it did in March 2020. For now, or in other words, in a little under a year, its hit all-time high levels again.
Most likely, Bitcoin will always be volatile and despite frequent declarations of death, so far the coin has always come back to life after bear market conditions. We probably should learn to give it time, just keep calm and keep on holding (no financial advice, remember?)
As for Ethereum, the situation is different. It skyrocketed in the autumn of 2017 up to $1400 and never bounced back. However, starting this summer – or should we say from the beginning of the DeFi boom? – the value of the coin has been relentlessly rising, and investors who entered the market in the summer 2020, are reaping the fruits six month after. So, half-a-year horizon!
That being said, is it Bitcoin or is it Ethereum? They are two similar projects on the face of it, however, they inevitably compete with each other in terms of the grand design, market cap and… price, which is good for us, investors.
Whatever coin appeals more to you, in the competitive market, two top dogs will have an incentive to survive the rise and fall of crypto economics, which leaves us with one simple fact.
Determine your investment goals and investment horizon, read whitepapers of these two projects, learn about where to buy crypto assets, choose your tokens and start considering entry points based on technical analysis and news.