Is Ethereum a Better Investment Than Bitcoin?

The comparison between Ethereum and Bitcoin continues. Given that the two cryptocurrencies are fighting for supremacy and crypto investors are reconsidering their inputs, it’s time to see what differentiates Ethereum from Bitcoin and which one is best for any investor.

It’s safe to say that overthrowing Bitcoin is not that easy since it’s the first cryptocurrency ever and has proved to be stable and secure throughout the years.

However, Ethereum came with something new to the market, being more than a transactional token ―its blockchain provides a great place for writing smart contracts, coding DApps and organizing DAOs. Still, it has its drawbacks, like any other cryptocurrency.

Let’s compare them and see which one is more profitable in the future!


A Short Insight into Ethereum

Ethereum was founded in 2015, long after Bitcoin’s release on the market. It can be used for exchanges through ETH, the cryptocurrency’s token, while the blockchain is what makes Ethereum unique. Developers and even regular people populate the blockchain for using its features, such as:

  • Writing smart contracts to allow transactions and agreements to be executed properly, which eliminates the need for a central authority;
  • Creating DApps for technology, art, gaming and technology purposes;
  • Participating in DAOs, which have no central governing body, with members sharing a common goal (for charities, collective ownerships and ventures and grants);
  • Sharing and creating NFTs;

As you can see, Ethereum has plenty of use cases. It’s also the second leading cryptocurrency on the market, meaning it has gained enough trust and credibility since its release in 2015. However, it had its tough times and is still struggling with the following:

  • Scalability since Ethereum has many proposes, and they all can lead to errors and malfunctions;
  • Its programming language, Solidity, is challenging to learn and use;
  • Fees since they change frequently, and this might scare investors;

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Bitcoin’s Evolution

Bitcoin was founded in 2009 and boomed the internet with its release. The first cryptocurrency was on everyone’s lips, contributing to its popularity and usage. Although some considered it too risky, it revolutionized the economic world, and the banking systems weren’t that reliable anymore because:

  • You could transfer money everywhere in the world to anyone;
  • No financial institution would be included in the process, so you wouldn’t need to disclose such information;
  • It was a decent option for those who didn’t have access to a bank account;
  • Mining was relatively easy back then;

However, as time passed and many other cryptocurrencies were released, mining bitcoins wasn’t that easy anymore, and investors were looking for better alternatives. Still, Bitcoin stayed strong and proved to be a respectable and trustworthy cryptocurrency, despite having issues with the following:

  • Not being widely accepted since some companies receive bitcoin payments, but worldwide adoption is not certain;
  • Causing deflation since the total number of bitcoins ever released will not exceed 21 million;
  • Lacking security;

The BTC price has made Bitcoin both an asset to have and a menace for investors who weren’t prepared to face the consequences of volatility. However, it still maintained its stability and high returns over a longer period.

Is There Something that Ethereum does Better Than Bitcoin?

Besides the multitude of use cases of Ethereum, the blockchain is driven by numerous developers who want to improve the environment. As a consequence, Ethereum experienced

many developments through the years, including the last one, called the Merge. This was one of the most awaited events in the cryptocurrency world because it meant that all cryptocurrencies were capable of such change.

The Merge happened in September 2022, and it changed the old proof-of-work consensus system to a proof-of-stake, which was supposed to make Ethereum more sustainable and more manageable to mine.

It’s also supposed to make transactions on the blockchain faster, which were already more rapid than Bitcoin’s.

Another reason why Ethereum might be better for us is that it provides real-world utility besides being a way for exchanging money. The ecosystem is full of NFTs, smart contracts and DeFi protocols that many investors back up, developers, entrepreneurs and IT professionals.

Another encouraging thing about Ethereum is its unlimited coin supply that exceeds Bitcoin’s, which is supposed to end at some point in the future. However, there’s another side to the story.


What is Bitcoin Providing that Ethereum will Never be Capable of?

Despite its substantial spike followed by significant plunges, Bitcoin is known to be the most resilient cryptocurrency on the market. That is because no matter what bear markets Bitcoin has experienced, it rapidly got back on its feet every time, and this pattern seems to be continuous.

On the other hand, Ethereum is pretty much struggling to be a reliable investment, especially in these times when the cryptocurrency market is attempting to remain balanced.

Another thing that might make investors choose Bitcoin instead of Ethereum is the lack of fees. As said before, Ethereum requires some fees to be paid for almost any kind of transaction, whereas on Bitcoin, transactions will go through even if you don’t pay.

The transactional process is more complex on Ethereum because the ether you’ll pay will be converted into gas, which is a unit that drives the computation that adds your transaction to the blockchain.

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Finally, Bitcoin might be a better investment because it is expected for it to be adopted worldwide by all financial institutions and to be used by many more people.

Some countries have already fully adopted Bitcoin as a legal tender (El Salvador), while others are slowly accepting bitcoin payments. It’s only a matter of time until Bitcoin gets to expand the area of usage, which we’re excited about.

Final Thoughts

To answer the question regarding which cryptocurrency is better, what we can say is that the quality depends on what you need it for.

While Bitcoin is great for peer-to-peer transactions, Ethereum is made for people who need to create and build distributed applications and smart contracts. Therefore, the investment you choose revolves around what you need to do with that cryptocurrency.