Bitcoin Versus Ethereum: Which Is Better 2021?
Cryptocurrencies are the talk of big finance right now, no longer an asset class only for retail investors, traders, or tech enthusiasts alone.
Regardless of which class you fall into, getting into crypto is a big decision. There’s the question of how much exactly to invest, and in which coins? The two top coins are the best place to start, but which of the two is the very best of the best in 2021?
Digital Gold Narrative
Bitcoin has ballooned over the last couple of years due to the ongoing digital gold narrative. The pitch is that the ultra-scarce cryptocurrency is even rarer than gold. The coin’s creator designed the cryptocurrency to feature specific attributes of gold, but Satoshi Nakamoto likely never realized they’d be disrupting the precious metal industry completely.
Over the last several months, metals have been increasingly demonetized at the hands of cryptocurrencies like Bitcoin and Ethereum.
Only 21 million BTC will ever exist, while there are over five times that in ETH. Gold is far less precious than either of these two crypto assets, by comparison. Also unique to crypto – when gold is in a bull market, the mining industry increases production, which eventually offsets demand. With Bitcoin, for example, when demand is high, supply is slashed in half every four years instead.
These factors have made Bitcoin the better proposition as a hedge against inflation. Ethereum, on the other hand, works more like perhaps the gas ETH fees are named after – a virtual commodity of sorts.
DeFi, NFTs, And More
Going back to the Ethereum analogy, – the entire ecosystem now living on top of the foundational blockchain layer relies on ETH for gas fees.
Nearly every significant DeFi token is built on Ethereum, and the decentralized applications they power utilize ETH. For those unaware, DeFi is an innovative new technology that allows permissionless borrowing and lending of assets. DeFi has gained popularity due to rates that crush traditional savings accounts while also being accessible to anyone.
NFTs or non-fungible tokens are a way to tokenize digital goods – all of which live on Ethereum. NFTs use a different token standard from the ERC-20 altcoins out there and range from digital art to music and much more.
With the Ethereum ecosystem booming, it’s hard to make the argument that Bitcoin is better. In fact, even Bitcoin has been “wrapped” in Ether to create tokenized WBTC to use within DeFi applications.
Hash Crash, High Gas Fees, And Emerging Altcoins
Now here’s where all that popularity of Ethereum starts to get bottlenecked. The ETH gas fees for transacting on the blockchain now comes with an extremely high price of doing business. The blockchain is struggling with throughput, and while developers are trying to address this with the ETH 2.0 update, it is taking too long, investors are getting frustrated, and competitors are popping up everywhere.
At the same time, Bitcoin just experienced a major hash rate decline due to a widespread power outage in China. It coincided with a flash crash worth more than $10 billion in long liquidations, however, it was triggered due to investors panicking over the control China has over the coin.
All while these situations brew in Bitcoin and Ethereum, other altcoins are starting to take off. Maybe Bitcoin and Ethereum don’t need to worry as much about one another as they do up-and-coming altcoins.
Bitcoin Versus Ethereum: Trade The Best Of Both Worlds On PrimeXBT
What exactly does all of this mean? Currently, there’s no clear winner between Bitcoin and Ethereum. Neither of these coins might win in the end in the wild world of crypto. It also means that these assets are far more speculative at this stage than many would like to believe.
More volatility is incoming as these assets go through price discovery, experience growing pains as a technology, and face off against younger and emerging coins.
Those that seek to stay ahead of these coins – good or bad – can trade Bitcoin or Ethereum CFDs using either BTC- or ETH-based margin accounts on PrimeXBT. The trading platform also offers other crypto assets, both trading against the dollar or BTC, in addition to forex, commodities, stock indices, and more.
With long or short positions, unexpected crypto market sentiment changes or issues with the underlying tech no longer pose as much of a threat to capital. Well-managed risk and the ability to profit from both directions of the market make trading on PrimeXBT the best of all worlds.