Bitcoin or Ethereum. Which should I buy?

Bitcoin vs EthereumAs Shakespeare says in one of his classics: “That is the question.” And indeed, this is the question facing cryptocurrency investors, who, given the volatility of this market, must decide which assets, given their track record, offer them more security.

But after this initial confidence, doubts arise about which cryptocurrency to choose. To help you make this informed decision, we’ll take a closer look at the status of two of the most important cryptocurrencies. Let’s get started.

The difference between Bitcoin and Ethereum

First of all, before delving into what makes these cryptocurrencies unique, it is worth noting that they are also associated with conditions that make them unique in the cryptocurrency market. Both of them fall under the category of older cryptocurrencies.

Due to their proven track record, these coins tend to be less exposed to the volatility of newer cryptocurrencies. In this sense, we can consider both, in a volatile market, to be fairly safe values.

As for the main advantage of BTC, We have to note that it is the cryptocurrency that opened Blockchain Technology system. It was the first to implement a platform of interconnected decentralized computers that makes it possible to track the history of assets in the market without being subject to the control of any central bank.

For its part, ETH, in addition to sharing How it works ETH, which was created using blockchain technology, has other functions that are not part of BTC’s capabilities. This means that ETH is not only used for monetary purposes. It can also be used in applications such as smart contracts and decentralized applications (Dapps).

Pros and Cons of Buying BTC

The first thing to keep in mind is that BTC is already an international currency, which provides security against failures and counterfeiting and attracts even institutional investors. But there are other advantages, such as the speed of your transactions and the ability to verify their true value at any time.

But there are some drawbacks that you should also take into account. For example, beware of criminal uses of this cryptocurrency. Likewise, you cannot expose your digital wallet to hacking, which could cost you thousands of euros. To prevent this, I recommend using a cold wallet. Finally, do not forget that to use it effectively, you need an exchange that is as reliable as possible.

Pros and Cons of Buying ETH

For its part, the relative benefits of acquiring ETH are linked to the fact that it is more than just a cryptocurrency. Therefore, apart from its use in the fields of DeFi and NFT, it has become popular in virtual reality Smart ContractsIn addition, its system has proven to be more flexible than BTC. We should also point out that there is a high-level community of developers working for ETH, which has attracted even institutional investors.

However, you should not invest in this cryptocurrency without first assessing some of the drawbacks. Among them, we note that it is more volatile than BTC, which means that you have to accept higher risks. However, it remains one of the most popular and safest cryptocurrencies today, as its market cap makes it one of the most distinctive cryptocurrencies today, and it has a longer history than most other cryptocurrencies.

Bitcoin vs Ethereum: Which is the Safer Option in the Long Term?

In light of the so-called “crypto winter” that cryptocurrencies have experienced in 2022, most analysts agree that the natural thing to happen throughout 2023 is for both BTC and ETH to continue to decline slightly (to $14,000 in the case of the former), until they stabilize and rise again.

In the context of this scenario, we should say that the starting price of Bitcoin is around $17,000. With this in mind, there are a few reasons why we believe that Ethereum may be the safer option in the long run. Let’s break them down.

The ETH merger and protocol changes were a sign that it might rally in 2022, which ultimately didn’t happen. However, these adjustments have set this cryptocurrency up to emerge from the crypto winter in better shape than BTC.

Let’s keep in mind that it has fallen sharply during 2022 and its price has dropped to $1266.35. Its greater security compared to Bitcoin is not only based on the fact that it continues to create applications and added value, such as Smart Contractsbut also on the fact that, relatively speaking, it has withstood the crisis better.

Although BTC charts look more attractive than ETH charts, you should not ignore fundamental analysis forecasts for trading. Of course, if you really intend to invest in Ethereum, do not forget to store it in a secure Ethereum wallet.

What is the approximate amount you should invest?

The decision on how much to invest in cryptocurrencies, such as BTC and Ethereum, depends on factors such as your risk profile (conservative or riskier), your knowledge of the industry, age and budget. If you are a beginner, we recommend that you first get your accounts in order before allocating the remaining portion of your funds to these investments.

Once you have clarified the importance of these variables, it is time to give a number. In this sense, many financial analysts advocate allocating between 3% and 10% of your diversified investment portfolio to invest in less volatile cryptocurrencies, which are the ones we present here. We will explain this with a numerical example, which is the best way to understand these things. If you have 60% of your investments in assets that are considered volatile, keep in mind that a maximum of 6% can be invested in the cryptocurrencies mentioned above.

Choosing between Bitcoin and Ethereum

When choosing between Bitcoin or Ethereum, it should be noted that the former of these cryptocurrencies has proven to be more attractive for long-term investments, i.e. buying coins and holding them until you decide to sell them. On the other hand, Ethereum is more sensitive to price fluctuations, which may lead, for example, to its higher flexibility and faster transaction processing.

In general, there is one idea that you can take into account when deciding on one cryptocurrency or another. When the bull market is strong, ETH performs better than BTC. On the other hand, when the market trend reverses, it is BTC that will fall less.

If you have any further doubts when faced with the question “Should I buy Bitcoin now?”, I highly recommend reading this post.

My personal advice

The key is that on the one hand, you have to carefully follow the cryptocurrency and dollar prices to decide when to enter or exit the market. On the other hand, you have to combine technical and fundamental analysis as much as possible. As a final tip, we recommend that you secure your investments by betting on the Material Bitcoin cold wallet and the Material Ethereum wallet, which are the two safest cold wallets today for storing Bitcoin and Ethereum.

In short, Bitcoin or Ethereum is a distinction that is somehow meant to bring security to the volatile world of cryptocurrencies. Information is the key to making your investments profitable.

Which one will you invest in? Share your opinion in the comments 👇