Ethereum is a better investment than Bitcoin

I think that Ethereum is a better investment than Bitcoin and that it will hold more value than BitCoin in the foreseen future.

Let me try to explain why by starting to talk about the main differences between both cryptos.

Bitcoin mostly has the purpose of being a “store of value”. Could be identified as the “new gold” like digital gold. In fact, it is not used as much as a currency due to its technological limitations. The value of Bitcoin resides in the fact that is an alternative to a Central Bank controlling FIAT money.
Also, the capitalization of Bitcoin is 21.000.000. There would never be more than that (and a lot of them are already lost) Therefore scarcity and low inflation will drive its price higher in the long term.

On the other hand, Ethereum has a different function. It is mostly a smart contract platform and a “decentralized apps” platform, meaning that the applications are not stored on a central server.

So now that we understand roughly that BitCoin is more a value reserve than a crypto coin for payments let´s analyze why I do think that Ethereum has better potential.

2. Ethereum has a better potential because it has more usage cases and it has a bigger community of people actually doing things with the cryptocurrency

Ethereum technology is vastly superior to Bitcoin´s tech, and Ethereum will have numerous functions in the future because it is a platform for decentralized apps and smart contracts. Both things will be used more and more as technology advances.

The current Ethereum mechanism is proof-of-work and in the next future, it should switch to proof of stake (Ethereum 2.0). Proof of Stake is much more eco-friendly than Proof of Work and more scalable so it should drive the price of ETH up.

Another thing to consider is that Bitcoin dominates the crypto universe, but is losing prominence. Right now, even when it has a 40% of market cap when we add all the cryptocurrencies together, is always decreasing in relevance.

For example, in January 2017 Bitcoin had 87% of the market and ETH 5.92%

Right now the percentages are roughly 40%/20%, still in favor of BitCoin, but the gain of ETH is awesome. Every day it goes, ETH is eating part of the cake of BitCoin.

So the thing is that the percentage in the total market cap of Bitcoin is decreasing in favor of ETH, and is happening for years now.

Finally, the ratio between Ethereum and BitCoin prices (in my opinion) clearly undervalues ETH so the potential to grow the price in ETH is much higher than in BitCoin.

Considering all the things above together, ETH must grow in the future more than BitCoin. If we take into consideration the fact that it has a technology that is superior to BTC´s, that ETH has 4x more developers than any other cryptocurrency, and that the future case usages are clearly weighted in favor of ETH, we can conclude that ETH is undervalued.

So the advice that I give to myself (and is only valid to me, and by no means, it can be considered a bit of investment advice for you as you need to do your own research), is to invest all the money I can (that I do not need) in ETH. Otherwise, my future self will be very upset with the version of myself living in 2022.

Cheers for the future!

Related posts:

According to the website Active Minds, 39% of college students experience mental health issues. When considering how many people attend college (which can be thousands of students), 39% is a pretty…

SAP.iO Venture Studio drives a new era of organic growth at SAP. It empowers entrepreneurial teams inside SAP to turn innovative ideas into profitable businesses and invests in these new employee-led…

Unaware that sound molds our perception of food and drinks, we actually eat with all our senses. You won’t feel the same way if your food looks awful on your plate or if the textures seem weird…