Tuesday, May 21, 2024

Bitcoin Versus Ethereum

bitcoin versus ethereum

Bitcoin and Ethereum (which is also referred to as simply “Ether”) are both cryptocurrencies that I have watched enjoying tremendous gains in the last year. Cryptocurrency–at least the two we are discussing here–is largely a speculative type investment with value driven primarily by investor enthusiasm rather than being backed by real-world value in gold or fiat currency.

Many know these things, but many more do not and it’s critical to preface certain conversations about cryptocurrency with a powerful reminder that this type of investing carries a far larger inherent risk of loss than stocks, bonds, or even certain commodities.

Bitcoin Versus Ethereum: Ether Gains Ground

All that said, Ethereum is gaining more traction among crypto traders–it seems to be the currency preferred by those who have jumped on the NFT bandwagon, buying art and collectibles sold as non-fungible tokens or digital-only assets.

In fact, Ethereum is on paper out-performing Bitcoin. From a certain perspective. With lots of caveats. And one of those caveats? That performance could go a lot farther than just on paper if conditions are right.

CNN reports Ether prices “are now hovering around $3,400” at the article’s publication time. That’s a drop in the bucket compared to Bitcoin’s $55k plus valuation. But what some market watchers are pointing out? Bitcoin prices have risen about 90% at times, which seems like a staggering set of gains for any investment, risky or not.

Comparing Value

But compare that 90% to Ethereum prices reported with gains of approximately 350% in value over the last year. Remember in 2017 when people were fretting about Bitcoin having too much value too fast? Remember the Bitcoin swan dive of 2018?  The same worries about Ether are present. But which way will things go? Does lightning strike twice?

The NFT craze is part of the rise in Ether (Ethereum) value. CNN reports that some technical improvements have also helped the Ether star to rise. Coinbase.com began supporting two stablecoins (crypto that is backed by real-world U.S. dollars) that are also compatible with Ethereum digital wallets.

Crypto Investor Evolution?

Investors now apply smart investing strategies to the highly volatile world of cryptocurrency. There is a trend toward diversified holdings. Diversified portfolios are a common and important long-term investment strategy. That is an indication that these investments might be here to stay, but there is going to be a very long road in the Bitcoin versus Ethereum showdown.

That said, we have some early indicators (in the developments discussed above) that Ether is likely to be a contender for the top slot in cryptocurrency. Does that competition makes things more unpredictable? Or less? Whatever happens going forward, smart investing strategies apply to crypto, too. Invest with care, and make informed decisions about where you put your real-world money.

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