If someone was to present to you the magical opportunity to have either 1 BTC OR 32 ETH to HODL (hold) throughout 2020 - which would you choose?
Well, we all know that magical opportunity will never be presented to you, however, if you were to make the investment for 1 BTC or 32 ETH right now which would you choose?
Let’s look at the facts.
1 BTC today will cost you $9,800 whilst 32 ETH would cost you around $7,000.
Now, which one of these projects will present higher growth during 2020?
If you were to look at the growth in 2020 so far, it does seem that Ethereum is winning. In 2020 alone, ETH has managed to increase by a total of 70%+ whilst BTC has increased by around 41% in the same period.
It is a very difficult decision to make, especially considering the fact that both of these cryptocurrencies have some market shifting milestones that will occur during 2020.
Bitcoin Block Halvening On The Horizon
Bitcoin faces a block halving this year. In fact, it is just a short 3 months away. If you are unaware of what a block halving is (or as they call it - a halvening), it is basically a process in which the mining reward for finding each block is halved. During May 2020, the next Bitcoin halving is expected to occur and the block reward will half from the current 12.5 BTC per block to 6.25 BTC per block.
This means that the inflation resulting from the influx of coins on the market will half which, in turn, will increase the scarcity within the market. This usually should result in strong price growth as there are less BTC that will be entering exchanges from miners to be sold.
Typically, in the lead up toward a block halving, the price will start to slowly grind higher with an ever-increasing pace as the halving date approaches. This is mainly due to the fact that traders know the exact date of when he halving will occur and they all believe that the price will increase at some point around the halving time, leading to everybody buying Bitcoin in the run-up to the halving.
Post-halving is a different story. The price is likely to drop slightly as traders start to close some of their previous positions and bank some of the profits they accumulated during the run-up. However, due to the increased scarcity, we could also price action continue to rise much further higher after the halving. Its really just a coin toss and we have to wait to see how traders react after the post-halving dump.
Ethereum 2.0 Set To Take Blockchain To A New Level
Now Ethereum has a different type of milestone ahead of itself in 2020. At some point during the year, we can expect the launch of ETH 2.0 which will see the Ethereum blockchain moving from a PoW coin to a PoS coin.
The benefits of this will be tremendous for the Ethereum ecosystem as it will fix one of the major problems that Ethereum has been facing over these past few years - scalability.
Currently, Ethereum can process around 20 transactions per second (TPS). Although this TPS rate is higher than the 7 TPS that Bitcoin can handle, it is still severely lower than where Ethereum needs to be.
The fact that Ethereum has maintained a 20 TPS rate has really slowed the growth of dApps that are built on top of Ethereum for the simple reason that developers know that if they deploy on Ethereum, there is a limit to the amount of throughput on the blockchain which will limit the potential growth for their dApp.
You need not look any further than the Cryptokitties epidemic when the collectible cat trading dApp clogged up the Ethereum blockchain which created a backlog in transactions and caused the fee per transaction to skyrocket!
Nevertheless, once Ethereum moves to a PoS coin the scalability and throughput for the network can increase and therefore we can expect a fresh wave of dApps to enter the ecosystem and deploy on Ethereum as developers will have the comfort in knowing that their dApp has substantially more space to grow.
Let us first take a look at the price analysis for both of these coins and then I will conclude with which one I PERSONALLY would hold during 2020.
Bitcoin Price Analysis
BTC/USD - MEDIUM TERM - DAILY CHART
What Has Been Going On?
Starting with Bitcoin, if we were to take a look at the daily chart above, we can clearly see Bitcoin rebounding from the $6,500 level during December 2019. The cryptocurrency went on to continue this surge during 2020 as it managed to increase by the 41% mentioned earlier to reach the current trading resistance at $9,800.
The growth for Bitcoin has been absolutely superb and we can certainly expect this bullish run to continue much further higher over the next few months at the very least.
Where Can We Go From Here?
So, where can we go from here?
The first obvious stop is the $10,000 level. If the buyers continue to drive higher from here, resistance will be located at $10,111, $10,500, $10,770, and $11,000. The resistance at $11K is bolstered by a bearish .786 Fibonacci Retracement level. If they can climb above this resistance, additional resistance can be expected at $11,609 (bearish .886 Fib Retracement) and $12,000.
Beyond $12,000, resistance lies at $12,513, $12,871, and $13,000. Above $13,000 lies strong resistance at $13,409 which is provided by a very long term bearish .618 Fib Retracement. $14,000 will provide additional resistance above.
If the bulls do manage to hit $14,000 (which they should) this still only equates to a 42% price increase from the current price. Even if they manage to hit $15,000 - this would equal a 53% price rise from the current price.
Ethereum Price Analysis
ETH/USD - MEDIUM TERM - DAILY CHART
What Has Been Going On?
Taking a look at Ethereum, we can see that the cryptocurrency rebounded at the $120 level during December which allowed the previous bearish trend to reverse and kicked off the 2020 bullish run.
We can see that, during January 2020, the bullish surge continued higher to meet the current resistance t at $219 - provided by a medium-term bearish .5 Fibonacci Retracement level which is measured from the July 2019 high to the December 2019 low.
Where Can We Go From Here?
If the buyers continue to break further higher from this resistance, the next levels of resistance lie at $242 (bearish .618 Fibonacci Retracement level), $250, $294 (bearish .888 Fib Retracement), and $300.
Above $300, resistance lies at $320, $345 (long term bearish .618 Fib Retracement), and $362 (2019 high). Just reaching the 2019 high will equal a 65% price increase from today’s price. This is already higher to the price rise for Bitcoin in hitting the $15,000 level.
Ethereum can continue even higher from here.
If they can climb above resistance at $375, the next level of resistance lies at $400. Above this, resistance lies at $417 (bearish .786 Fib Retracement) and $459 (bearish .886 Fib Retracement). Hitting these two levels would equate to a 90% price increase and a 108% price increase from today’s price, respectively.
So, Which One To HODL?
Well, just looking at the price analysis we can see that Ethereum seems to have an easier to climb by a higher percentage than that of Bitcoin. This could be enough already to close the conversation and conclude that HODLing 32 ETH will provide a higher return than holding 1 BTC.
However, let me explain a little further.
You see, although the Bitcoin block halving is a significant milestone for the Bitcoin blockchain, the Ethereum upgrade to 2.0 will provide a strong foundation for the growth of the entire ecosystem.
Basically, the Bitcoin block halving related price hikes all revolve around 1 certain date within the year. On the other hand, the Ethereum related price increases will start once Ethereum upgrades to 2.0 and only continue further higher from there as dApps start to choose ETH as the best blockchain to deploy upon.
Furthermore, with the new wave of Decentralized Finance making the rounds, the fact that Ethereum will be able to provide the throughput for this will lead to the best DeFi dApps choosing ETH as their blockchain of choice.
In conclusion, I believe that holding 32 ETH is probably the better move. ETH has been battered over the past couple of years which has led to a sustained bearish price depression. This means that, during the rebound, ETH has much more ground to cover and therefore has a higher potential for growth than that of Bitcoin.
Additionally, in the battle between the BTC Block Halving and the upgrade to ETH 2.0 - Ethereum will always win due to the fact that it provides a new foundation for the Ethereum ecosystem to grow from.