It’s been a wild year for both Bitcoin (BTC) & Ethereum (ETH). Bitcoin’s price has increased by almost 300% in the last year, while Ethereum’s price has increased by over 9000%, despite the recent sharp declines in both currencies’ values.
When the price of a cryptocurrency like Bitcoin or Ethereum drops, it’s a good time to “acquire the dip” and purchase more. When it comes to investing a small amount of money, which cryptocurrency would provide you the most return? The following information is critical for you to understand.
Arguments in Favor of Bitcoin
Bitcoin is among the first digital currencies, and as a result, it is the one with the highest brand awareness.
Any cryptocurrency that wants to be successful will have to gain universal acceptance among businesses that deal with sellers. Which already has a leg up on the competition since BTC is the most well-known cryptocurrency. According to Fundera, more than 15,000 businesses worldwide accept Bitcoin as payment, and the more businesses that take Bitcoin, the more likely it is to become a widely accepted payment method.
Furthermore, because Bitcoin is a deflationary currency, its value is expected to rise steadily over time. So it may have a leg up over inflation-prone fiat currencies like the US dollar.
The Most Significant Dangers
Any cryptocurrency has a significant degree of risk because it is still a purely speculative asset. While hundreds of companies accept Bitcoin, many sellers are still not on board with it. Whether Bitcoin will finally be universally recognized there is a mystery at this time. So if it doesn’t catch on, it will be rendered useless.
Another drawback of Bitcoin is the amount of energy it consumes. There is an enormous amount of computing power required in the Bitcoin mining process. As per research conducted by the University of Cambridge, Bitcoin transactions presently consume a lot more energy than the whole country of Venezuela.
In light of the high energy consumption, authorities and investors are already on edge. Tesla recently stated that it was banning Bitcoin as a payment method because of its high energy demand.
The Argument in Favor of Ethereum
A native cryptocurrency called Ether lives on top of Ethereum’s blockchain. Ethereum is a well-known brand in the blockchain industry, and the Ethereum blockchain is home to a wide range of applications.
Non-fungible tokens and decentralized finance both use the Ethereum network (NFTs). Eth is open-source mechanization that enables blockchain developers from across the globe to make new applications. If any of these new projects are successful, Ethereum (and Ether) will gain as well.
Users may conduct secure and trustworthy transactions without the assistance of a third party, like a lawyer, using “smart contracts” created by developers on the network. Smart contracts have the potential to transform a wide range of businesses, providing Ethereum a competitive advantage.
Finally, Ethereum blockchain engineers are hard at work on a new, more energy-efficient version. Ethereum 2.0, the next generation of the Ethereum platform, is set to be deployed earlier this year and will consume 99.99% less power than the present platform.
The Most Significant Dangers
There’s no assurance that Ether or Ethereum will be widely accepted because cryptocurrencies are very speculative. As a result, if businesses can only take one type of crypto, they may choose Bitcoin over Ether.
Similar to the blockchain, no assurances can be made about how revolutionary it will be. Because the blockchain technology that Ethereum relies on has many advantages, if blockchain fails, Ethereum will be harmed.
The Right to Choose
It’s important to remember that investing in cryptocurrency has a significant amount of risk, so think twice before you invest.
Even if none of these currencies are a “safe” trade, Bitcoin may be less risky than Ethereum since it has a broader track record and a more well-known brand name. However, Ethereum may have more room to develop in the future.
Take the time to do your homework and be ready to take on some risk, whichever route you choose to go down. Some people are better off investing their money in stocks and bonds, while others should stick with cryptocurrency.