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Ethereum or Bitcoin: What is a Better Investment Option?

The major cryptocurrencies have really changed the world, but which one is better for investment?

When it comes to cryptocurrencies and the cryptocurrency market, any person interested in them will, first of all, mention Bitcoin and Ethereum. The major cryptocurrencies have really changed the world, but which one is better for investment? Should I convert USDC to ETH now or is it better to buy BTC?

What is the difference between Bitcoin and Ethereum?

Bitcoin was the first successful cryptocurrency and was created as an alternative means of payment, a decentralized digital currency. Although during its existence it has not yet become an alternative form of money, it is still evolving towards a means of payment and a means of storing value. Experts say that Bitcoin is acquiring more and more features that bring it closer to gold.

Ethereum is a multifunctional blockchain platform and cryptocurrency. Initially, the goal of creating Ethereum was to develop an improved version of Bitcoin, but today there are more differences between the main cryptocurrencies than similarities. Ethereum is multi-tasking and, above all, it remains a development tool. The massive emergence of new crypto projects and entire areas of the crypto industry is primarily the merit of Ethereum.

Bitcoin is more independent and decentralized and has more confidence from investors. There are fewer hard forks in its history, while Ethereum already boasts a whole bunch of individual options that are available for purchase, including on  on par with the original coin.

On the other hand, ETH has more applications. The platform’s capabilities can potentially be used in logistics, finance, and audit. Another undoubted advantage of Ethereum is the high speed of transaction processing. To eliminate problems with the scalability of the blockchain, a transition was made to the Proof of Stake consensus mechanism. It is expected that after the phased introduction of additional updates, the throughput of the platform will increase by orders of magnitude.

In terms of the combination of characteristics and capabilities, Ethereum surpasses Bitcoin in terms of the increase in the volume of transactions and the number of active users. At the same time, Ether is more volatile than Bitcoin.

Another significant difference concerns monetary policy. The emission of Bitcoin is limited to 21 million units, and this creates the preconditions for an increase in the price of the asset. The supply of ETH coins is unlimited, although anti-inflationary measures are provided in the tokenomics.

The price of BTC is formed directly by the market, while the price of ETH is highly dependent on the platform itself and the pace of development of the DeFi industry. At the moment, the Ethereum blockchain is the leader in its segment, but the emergence of a worthy competitor is a matter of time.

Which coin to choose for long-term investment

The long-term prospects for Ethereum and Bitcoin depend on many variables. First of all, it is the functionality of each asset, the ratio of supply and demand, as well as pressure from regulators.

Ethereum firmly holds the second position in the ranking of the most capitalized cryptocurrencies. Bitcoin is also consistently the flagship of the market and sets its overall dynamics. There are no prerequisites for moving ETH in the rating one line lower or higher yet.

Today, we can confidently say that both assets are suitable for long-term investment. Bitcoin is more stable, less volatile, it has a more stable reputation. The adoption of Bitcoin as a means of payment increases its credibility of it, and institutional investors are investing in the coin.

However, Ethereum is now cheaper and could potentially be more profitable. Therefore, it makes sense not only to follow the Ethereum rate but also to include it in an investment portfolio to diversify risks.


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