One of the most common cryptocurrency questions out there has always been, and may always be which is a better portfolio choice? Is it better to own 1 full bitcoin, or to own 32 Ethereum?
In a perfect world, we would all like to own both and not have to choose between the two. Just a year ago it would have been much more realistic for a person to be able to achieve both of these goals. But during this bull run, the price of both Ethereum and bitcoin have already risen to a point where a person probably won't even be able to reach one of these goals. But that doesn't mean you shouldn't try. The fact is that if you are reading this article you are still early to the cryptocurrency market. During the last few years, the number goal to accumulate was always either 1 full bitcoin or 32 Ethereum. But as adoption continues to increase the "dream" accumulation numbers may drop, because the values of the coins will have gone up significantly. But for this article, we will stick to the main goal.
I still think a person can achieve the above goals, but it is going to take a lot of hard work, perseverance, dollar cost averaging, and patience. Last year after the price crash in March, I completely changed my strategy on how to accumulate cryptocurrency. Before that time I had been buying a little bit of everything, but this resulted in me having a little bit of everything, but not a lot of anything. I soon realized this made it hard to have any type of gains that were going to satisfy me and it also made it more difficult to accumulate the portfolio goals that I was striving towards. It was at this time that I decided to sell off coins that I felt were junk or didn't have faith in, and become hyper-concentrated. I focused almost only on bitcoin and Ethereum and this is when my portfolio began to grow much faster than ever before. While being so concentrated on a few coins can be riskier, it can also bring much more reward as well. But because I was so focused on the two coins; I was able to achieve many of the goals that I had set out towards. So it is still possible for you to achieve as well! If I can do it, so can you.
The two blue-chip blue chips of all cryptocurrency. Bitcoin; the king of cryptocurrency, and Ethereum, the new world computer. Both of these blockchains offer something great, exciting, and unique and do some amazing things. They also have their drawbacks as well. But if you could only own 1 bitcoin, or 32 Ethereum, which one would you choose? Is there even a correct decision!? I will give a brief overview of each of these and then come to my conclusion.
Ethereum
Ethereum has the potential to become the world computer and has extremely high potential. The market cap is currently about 1/5 of bitcoin's market cap and that means there is more room to grow. This also will make it more volatile than bitcoin as well. Somedays it will go higher up by percentage, and other days it will go further down as well.
Ethereum has the largest ecosystem out of any blockchain out there and it isn't even close, even including bitcoin. It also does more transactions per day than bitcoin. Most developers are using ETH to develop their tokens, NFT, DEX, smart contracts, or even for DeFi. The possibilities are truly endless with Ethereum.
Although right now it is being plagued by high fees, and slow transactions; this is only going to be a temporary problem. Years down the line the Ethereum 2.0 upgrade will launch, and then after that ETH 3.0 is planned to release as well. These upgrades to the blockchain will help remove all of ETH's current problems, and if the launches go smoothly it is possible that the market cap of Ethereum could someday surpass Bitcoin. These upgrades have been plagued by very long delays, With Ethereum 2.0's full launch release originally being scheduled for launch years ago, but we are still waiting for its full launch. Many people have doubts that these upgrades will ever actually launch. And this is where the risk comes in by investing in Ethereum. Unlike bitcoin which is practically a finished project; when you're investing in Ethereum, you are investing in its potential. If everything goes smoothly with the upgrades all should be well. But the longer that development takes the bigger opening there is for a competitor to replace Ethereum such as Cardano, Polkadot, Cosmos, or more. While I hope that Ethereum wins this development battle, as an investor it is important to know all possible outcomes.
Because the Ethereum ecosystem is so large, it does make upgrading it a more complex challenge, without breaking any of it. There was a quote that said it is like repairing a plane mid-flight. But late last year phase 0 for ETH 2.0 officially launched and it was a great first step towards fulfilling the future promise of Ethereum. With 2.0 comes the ability to stake your ether. This would be an incredible way to make a passive income going forward.
With the price of Ethereum
at around $1,800; by staking 32 ETH you can receive a very nice amount of ETH as a reward. But if you then imagine the price of ETH going up to $10,000, or even higher; it isn't so crazy to think that staking Ethereum could potentially become your full-time job.
While the inflation rate for Ethereum continues to be much higher than bitcoin, and there isn't a max supply cap yet. ETH is trying to correct this weakness. The introduction of EIP 1559; will introduce fee burning and eventually make Ethereum a deflation coin. This means that over time the circulating supply will decrease, and therefore the price will probably go up as well.
During this bull run, I would not be shocked at all to see the price of Ethereum go up to $10,000. Ten years later the price could go to interesting places, especially if all the upgrades come to pass.
When comparing Ethereum to bitcoin; it is important to remember that Ethereum is much younger than bitcoin, and that helps to put some of its developmental issues into perspective.
Current Value of 32 ETH = $57,600
Bitcoin
Often seen as the king of cryptocurrency and the must-own one as well. When anyone asks me what coin I would recommend them to buy, I have always said bitcoin. While developmental improvements continue to happen for BTC, for the most part, it is a finished project, although there is finally something exciting progress on its second layers. This means it is a less risky investment choice than Ethereum. Recently BTC has finally reached a market cap of over $1 trillion and that is extremely exciting. But because its cap is larger, it takes much more for the price to rise and also to go down.
From an investment perspective, it appears that bitcoin is designed to pump forever. Having a max supply cap of 21,000,000 million coins and millions of those coins being gone and lost forever. Then taking into account the bitcoin halving every 4 years, which cuts in half the inflation rate. This is a case of pure supply and demand, and the demand appears to only be going up sky-high. Unlike some other coins or fiat, the max supply cannot be raised and this rewards users for saving, which could change people's lives. For once protector the little guy who doesn't have a lot of money. While of course, the big institutions will always win, a regular person's money value won't decrease over time, but will in fact increase. This is something that has never been the case before.
While the little guy was the first mover into the space, that is no longer the case. The big money and institutions have arrived. Meaning that just like in today's world, there will always be a spread between the have's, and the have-nots. But if you are a bitcoin investor the institution's arrival is like music to your ears. They are rushing to buy bitcoin, and the limited supply is causing the price of BTC to surge, making all BTC holders richer. And it isn't going to stop. At the moment Bitcoin has been the cryptocurrency investment of choice, but investments in Ethereum will pick up as well. With institutions entering the game, I do believe it will prevent the bear markets from becoming so large for bitcoin and will look more like the less severe stock market. These institutions have stronger hands and tend to buy to hold, rather than sell like retail investors. I tend to believe that we will never see the price of bitcoin under $50,000 again.
In the past it was looking like Ethereum would be the only option to make a passive income by staking your Ethereum. But services like BlockFi and Celsius have leveled the playing field in that regard. You can now lend out your bitcoin and earn great interest. If bitcoin were to go to $500,000 and you were earning 0.01 BTC off these services each month that would net you a salary of $50,000 per year. Enough for some people to live off of. If the price of BTC were to go higher, or if you were lending out more then it becomes even more rewarding.
Bitcoin does have some negative traits as well. It can be quite slow, and during peak transaction times, it can become quite expensive. Also at the time, you can't develop many of the things you can do on Ethereum. The plan is for all of that to come to bitcoin via 2nd layers, but we will see if that does happen. Also, the price of one bitcoin is already over $59,000 and this can be quite an intimidating number for a retail investor. They might feel it is too expensive, that they already missed out, or perhaps they might not know that they're able to buy fractions of a bitcoin. This has caused the bitcoin community to strive to use Sats as the main value rather than a full bitcoin. There still is work to be done to get this message across to the average user.
Current Value of 1 Bitcoin = $59,000
Before I come down to my verdict, I do want to stress that I love both of these blockchains and am invested in both of them. I like the potential that Ethereum can bring and all that could do in the future. But if I was forced to choose only one of these; I would choose the full bitcoin. This comes down to the fact that I have more trust in bitcoin in general. While there is still rolling out its upgrades, and going head to head with its smart chain competitors; for the most part bitcoin has already won against its own. Then taking into account that the institutions are heavily going into bitcoin, and you're also able to lend out your coins if you are interested in making a passive income.
But at the end of the day, you can't go wrong with either of these options. If you can accumulate either a full bitcoin or 32 ETH, you have a great foundation for your portfolio that could potentially make you rich someday.
But how about you!? Which would you rather have? 32 Ethereum or 1 full bitcoin and why!?
As always, thank you for reading!
