Good time to swap Bitcoin for ETH?

By minimalist | minimalist | 29 Apr 2021

Over the past month, the price of ETH sky-rocketed. In USD, but also in Bitcoin. This means you currently have to pay 67.96% more when buying ETH with BTC:


This makes some who own Bitcoin wonder - should I convert to Ether?

  • Owning Ether feels like owning the future.
  • I am looking forward the transition to ETH2 with the more environmental friendly Proof of Stake.
  • I like there is a large, active community.
  • Like BTC, ETH is a big player as well, the risks are comparable from that perspective.
  • I like the idea of getting serious rewards for staking.
  • I even like that it is not simple to un-stake ETH, as I think the more people having to hold it long-term, the less volatile the price.

However, over the past year, the price of ETH in BTC has been the subject of massive macro-fluctuations. While in general it is going up, after continuous runs as the current one, it always lost ground (see below image). This would worry me if converting BTC to ETH right now. Though in the end, one never knows. Timing the market is simply not possible.



To convert or not to convert, that is the question.

The answer may depend on how diverse your crypto portfolio currently is. After the recent movements, I recommend checking this to get a sense of where your investments are.

If you happen to have a disproportionally large allocation of BTC, converting some of it to ETH may help hedge against the risk that ETH is going through the roof while BTC stays flat or even declines in value. Yet, it may not be the moment to convert it all.

I would think my portfolio is pretty diverse (see below). Would be curious to hear from others what they consider diverse though.

ETH - 35%

BTC - 15%

UNI - 5%

ADA - 5%

DOT - 5%

XRP - 5%

DOGE - 4%

TRX - 3%

BNB - 3%

BAT - 3%

STORJ - 2%

FIL - 2%

XLM - 1%

ZRX - 1%

XTZ - 1%

SOL - 1%

LINK - 1%

THETA - 1%

CHZ - 1%

DASH - 1%

(plus some dust here and there)

Given a modest 15% in BTC, I stick with them for now. I like holding long-term, and keeping a diverse portfolio seems more important than chasing short-term gains.

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