It has been a hard couple of months for the crypto industry. Between regulation woes and a general lack of momentum, selling pressure has been highly erratic.
And when the markets are the most volatile, investors turn almost always toward the more stable assets in the industry. For crypto, the leading blue-chip coins remain Bitcoin and Ethereum.
These cryptocurrencies act as market leaders thanks to their high adoption by institutions and mainstream investors. But what if you had to choose only one? Should you swap ETH to BTC or go the opposite route?
We will try to answer these questions in this article, by outlining these assets’ fundamentals and providing some price analysis. Let’s begin.
Origins and Founding Vision
Bitcoin and Ethereum both pioneered blockchain technology in their own way.
Bitcoin’s Genesis
Created fresh out of the 2008 banking crisis, Bitcoin was the first decentralized peer-to-peer payment system to come out on the markets. With a vision to give back the financial power to the people, it introduced the concept of transactions without intermediaries and self-custodianship.
Using a proof-of-work algorithm, allowed miners to confirm transactions and create new BTC. The caveat is that there will only be 21 million BTC ever created, which introduces forced scarcity for this asset.
Ethereum’s Inception
Following Bitcoin’s lead, Vitalik Buterin created Ethereum in 2015 to provide more utility to blockchain technology. Until its inception, blockchains could mainly be used to transfer assets from one user to another, securely and in a decentralized manner.
With the advent of smart contracts on the Ethereum network, blockchain exponentially increased its use cases. Developers could now create decentralized applications and mint tokens that would become the pillars of DeFi.
Underlying Technologies
Bitcoin and Ethereum differ quite drastically in their underlying technologies.
Bitcoin’s Blockchain: Security and Simplicity
Bitcoin utilizes proof of work, where miners compete to discover the next block on the chain. This allows them to confirm transactions and mint new bitcoin on the network. Thanks to its high decentralization of miners, Bitcoin remains extremely secure, as no entity can take control of the network at any time.
It’s a simple concept that has allowed BTC to become a secure and easy-to-use store of value asset.
Ethereum’s Smart Contracts: Programmable Decentralization
Ethereum has transitioned to proof of stake, where validators need to stake ETH to be able to confirm transactions. However, the main difference with Bitcoin is that Ethereum allows the deployment of smart contracts.
As such, it acts as a global, decentralized computer, where anyone can deploy applications and use the security and power of the network to run a project.
Scalability and Transaction Speed
Ethereum and Bitcoin both have some issues in this department.
Bitcoin’s Scalability Challenges
Bitcoin has been struggling with scalability since its very inception. The SHA256 algorithm that confirms transactions is purposefully slow and doesn’t allow for more than 7 transactions per second. This effectively prevents holders from using Bitcoin as a means of payment, due to the long delays of the network.
However, scalability solutions like the Lightning Network are attempting to solve this issue. They achieve this by validating transactions off-chain and validating them on the Bitcoin network in batches.
Ethereum’s Transition to ETH 2.0 for Improved Scalability
Ethereum encountered the same issues as Bitcoin, at an even larger scale, due to the number of transactions needed to validate smart contracts. However, it recently migrated to proof of stake to reduce its carbon footprint.
Moreover, additional solutions like the upcoming sharding will allow Ethereum to gain linear scalability, where sidechains will execute transactions.
Price Trends and Volatility
Let’s have a look at BTC and ETH price trends next, similar to comparing ALGO vs XRP.
Bitcoin’s Historical Price
As the first cryptocurrency, Bitcoin has seen all the bullish and bearish cycles in the industry. In 2021, it reached an all-time high of $69,000 per coin. Following a challenging bear market, the price has retraced to $27,300.
Priceprediction.net gives a target of $37,299.27 per BTC for 2023 and goes as high as $78,762.53 for 2025.
Ethereum’s Price Growth
Ethereum reached $1,200 in 2018, but suffered in the bear market, falling down as low as $112. In 2021, it reached a new all-time high of $4,810 and has currently retraced to $1,700.
Priceprediction.net forecasts a price of $2,335.71 for 2023 and provides a bullish long-term vision of $5,124.95 for 2025.
ETH to BTC: Best Option
Ethereum and Bitcoin have similar upside potential, with ETH having the edge. That said, BTC remains a much more popular coin, especially with institutional investors. Depending on your risk profile, you could opt for BTC as a safer bet, and for ETH as the more high-risk, high-reward asset.