Why I Invested in Bitcoin and Ethereum The Motley Fool

By Thrive | FinTech

Jun 16

Its first fork was after the DAO hack that led to millions of dollars in losses. Since Ethereum 2.0 is Proof-of-Stake, it cuts on the cost of gas making it easy to transact on this blockchain. It also alleviates the problem of emissions by getting rid of miners. Such progressive moves will keep endearing Ethereum to investors, and drive up its demand. All transactions on the Ethereum blockchain need Ethereum (ETH) for them to go through. This is a big deal because the huge number of DEXs running Ethereum projects create infinite demand for Ethereum.

Why invest in Ethereum over Bitcoin

This is quite evident in Bitcoin’s declining market dominance that now stands at 40%. As its market dominance drops, one of the altcoins that are reaping from the changing dynamics is Ethereum. Ethereum is benefiting due to its use cases that drive up its prospects for growth. Bitcoin has become quite expensive lately and is trading between $19k and $20k at the moment. This means it has locked out many small investors who may have wished to buy a whole unit of Bitcoin. Bitcoin ETFs have been a thing for quite a while now in the crypto space.


Bitcoin was created as an alternative to national currencies and thus aspires to be a medium of exchange and a store of value. Ethereum was intended as a platform to facilitate immutable, programmatic contracts and applications via a global virtual machine. Blockchain technology is being used to create applications that go beyond just enabling a digital currency. Launched in July 2015, Ethereum is the largest and most well-established, open-ended decentralized software platform. At the start of the cryptocurrency boom in 2017, Bitcoin’s market value accounted for close to 87% of the total cryptocurrency market. However, by late August 2022, Bitcoin’s market share had declined to 39.6%.

Therefore, it seems reasonable to test the waters before diving in headfirst. Also, new laws and regulations could pose a threat to Ethereum’s future. Investing in cryptocurrency can come with hefty taxes, which could limit the number of people willing to invest. In addition, lawmakers are still figuring out how to regulate the crypto market.

Ethereum has a quality developer team

Valuing cryptocurrency is a whole different ball game than valuing stock in a company. There are no quarterly reports or guidance, no conference calls to help you monitor business updates or gauge management’s tone for clues as to where the company is headed. There’s one to credit if the price rises, or blame if the price falls. Guy Spier, one of my favorite value investors, has long said that one of the best ways to learn more about something is to have skin in the game. He’s often joked about owning one share of hundreds if not thousands of companies.

  • If there was ever a reason to invest in Ethereum, then DeFi and NFTs should top the list.
  • The designers of Ethereum built the platform to provide a foundation for running decentralized software programs, which have become known as smart contracts and distributed apps (dApps).
  • Cryptocurrency volatility has become as standard as the setting sun.
  • This is evident in the Senate confirmation of a pro-crypto friendly person as the chairman of the Securities and Exchange Commission.
  • In my opinion, they’re the two most likely cryptocurrency candidates to be in demand going forward and the ones I would buy today (but more on that in a bit).
  • With a brokerage, however, there is no “other person” – you come and exchange your crypto coins or fiat money with the platform in question, without the interference of any third party.
  • There are all kinds of reasons why you might want to invest in Ethereum — probably some you’ve never considered.

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Why I Invested in Bitcoin and Ethereum

The Bitcoin network has no native capability of facilitating peer-to-peer loans or yield farming. This is where Ethereum comes in and makes Bitcoin a more useful asset. Bitcoin has remained the number one, though some experts believe Ethereum will supersede the original cryptocurrency, sooner or later. The Russian-Canadian programmer, who had been introduced to Bitcoin in 2011 – aged just https://www.xcritical.com/blog/ethereum-vs-bitcoin-the-two-cryptocurrencies-compared/ 17 – by his father, sought to establish a platform on which decentralized applications could be created. His vision was to have a programming language that could deliver extraordinary functionality to the blockchain beyond mere currency transactions. For many in the cryptocurrency world, it was the most exciting development since Bitcoin, the founding crypto, was introduced in 2009.

Why invest in Ethereum over Bitcoin

Since Ethereum is a relatively new platform there is much more availability of coins. Bitcoin is known to have a coin supply cap of 21 million BTC. Ethereum has around 92 million coins that are being circulated. People usually tend to overlook the fact that it will remain an inflatory currency. People tend to shrug this off and claim that this actually does not matter.

Are all the top cryptocurrency exchanges based in the United States?

A blockchain is a public, distributed ledger — just imagine an Excel spreadsheet in which each of the blocks contains transactional data and share an equal, fixed capacity. This creates supply and demand, which is healthy for a store of value. When you look at Ethereum VS Bitcoin, you can see that their goals are largely different.

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