If you wish to invest in cryptocurrency, you will likely want to start with one of the major cryptocurrencies. However, you may not know whether Bitcoin or Ethereum is the right choice. Both are popular choices to buy from an investment standpoint or if you plan to use the crypto to make purchases. Therefore, there is abundant expert advice online suggesting you choose one over the other or that you divide your investment between the two.
First Confirm You Should Buy a Crypto
Before trying to determine whether it is better to buy Ethereum or Bitcoin, review some of the reasons you want to invest in cryptocurrency in the first place. Some experts express concerns that cryptocurrencies are in a bubble that will burst in the near future, but many disagree. Those who continue to support buying cryptocurrency point to multiple factors that can make a crypto investment a smart idea, including:
- Investing in cryptocurrency is easier than ever before;
- Governments are introducing improved crypto regulations, which can reduce uncertainty and prevent scams, calming investor fears;
- The blockchain technology behind cryptocurrency has proven itself to be incredibly useful and sees increasing adoption across all industries, including with major brands;
- There is the potential for large gains, although you must also be aware of the risks associated with cryptocurrency’s volatility;
- The imminent trade war between China and the United States makes traditional investments uncertain and riskier;
- Cryptocurrencies are a way to diversify your portfolio.
Some experts suggest only investing money that you can afford to lose in cryptocurrency. This allows you to rest easy even with the volatile market while still taking advantage of potential profits.
Comparing Current Market Caps and Trade Volumes
To begin your research into whether you should buy Bitcoin or Ethereum, take a look at how each fits into the cryptocurrency market. At the time of writing, CoinMarketCap listed Bitcoin with a market cap of 17,185,312 BTC or 131,403,171,005 USD, and a 24-hour volume of 560,890 BTC or 4,275,141,642 USD. According to this website, Bitcoin maintains the top-ranked spot.
CoinMarketCap places Ethereum in the second-ranked spot with a market cap of 5,529,133 BTC or 42,136,372,170 USD, and a 24-hour volume of 219,870 BTC or 1,675,581,012 USD.
As the two cryptocurrencies in question have the first and second rank, this indicates that it is easy to buy and sell either one.
Comparing Current Prices
Another crucial piece of information to view in real-time when making your decision about which cryptocurrency to invest in is their value. At the time of writing, one Bitcoin was worth 7,682.67 USD while one Ethereum was priced at 421.78 USD (or 0.054 BTC). This means that if you have a limited amount of money to invest in cryptocurrency but want to maximize the number of tokens you can purchase, Ethereum will get you more coins for your money. However, having more tokens of one cryptocurrency will not necessarily be a good thing if the other crypto sees a dramatic rise in value while the tokens you hold remain the same.
Experts Suggest Diversification
Ideally, you should follow the same rule for your cryptocurrency purchases as you do with any other type of investment: diversify. Diversification will always be the smartest strategy from a pure investment standpoint and is what many crypto experts suggest. This helps you weather drops in the price of one cryptocurrency thanks to the other cryptos in your portfolio.
The only thing to keep in mind is that the values of various altcoins do tend to follow the price trends of Bitcoin. This makes diversification slightly less effective for cryptocurrencies than with other investments, although it is still a smart move to buy a combination of Bitcoin and Ethereum, perhaps along with a few other coins.
Reasons to Buy Bitcoin
To start getting an idea of how much Bitcoin to buy compared with Ethereum, take a look at reasons to specifically purchase Bitcoin. One of the most compelling reasons to buy Bitcoin at the moment is that its current value of approximately 7,700 USD is significantly smaller than its 2018 high, 17,500 USD in January. While there is no guarantee that Bitcoin will go back up to this level, there is still a good chance that the price will rise, and some predict that a new all-time high is yet to come, although others are unsure. Additionally, others point out that cryptocurrency is becoming more of a mainstream concept and Bitcoin is the leader of this movement. Its recognizability and popularity help make it a strong investment choice.
Reasons to Buy Ethereum
Ethereum has equally compelling reasons to buy it, including that it is the second-most-recognized cryptocurrency. As with Bitcoin, while the popularity of cryptocurrency grows, Ethereum should experience an increase in demand and, therefore, price since it is among the best-known cryptos. Additionally, some feel that the applications for Ethereum may be greater than those of Bitcoin due to its unique use of blockchain technology. Usability will likely lead to the success of the cryptocurrency, which will cause an increase in value. To further demonstrate its usability, you need only to look at how companies use the blockchain. Several Fortune 500 companies back Ethereum as part of the Enterprise Ethereum Alliance, and such financial institutions as Bank of America have begun incorporating Ethereum’s blockchain into their structure.
There is no correct answer as to whether Bitcoin or Ethereum is a better buy. You can find an abundance of reasons to purchase either of these cryptocurrencies, and they each have their benefits in a diversified investment portfolio. Instead of focusing on buying one or the other, aim for a balanced approach that involves both.