There are over 10,000 cryptocurrencies in the market and we hardly recognize 10-20 of them. However, almost everyone interested in cryptocurrencies to some degree already knows about Bitcoin and Ethereum.
Bitcoin and Ethereum cannot be rivals, as both have different values, different purposes, and a different fan base. A few things are common too, such as both hold value and can be sent and received. However, there is a trending debate going on as to which one should we buy in 2021?
In this blog post, we will talk about the same topic and try to find the answer based on facts, future scope and influencing factors.
Bitcoin v/s Ethereum and the Year 2021
It feels at times that 2021 has been a rollercoaster for everyone and every business but for Bitcoin (BTC) and Ethereum (ETH, this year was like a serious Kingda Ka (tallest roller coaster). Bitcoin and Ethereum started this year at $29,374 and $730, respectively. While BTC touched its all-time high of $64,863.10 on April 14, ETH reached its all-time high of $4,362.35 a month later on May 12, 2021.
Over the past 8 months, the price of Bitcoin has increased by almost 300%, and Ethereum by more than 900% and both have also experienced massive declines in the past few weeks. Now that prices of both and most of the cryptocurrencies are falling, it may be a great time and opportunity to “buy the dip” and invest in Bitcoin or Ethereum while they are a bit more affordable. To choose one from them, let’s talk about them one by one, and we would like to start with the most popular one.
Bitcoin is one of the original cryptocurrencies, and most people have heard or read about it at least once in their lifetime. It is regarded as a deflationary currency, meaning that it should only increase in value over time. So what was its highest value now will not be the highest in the future.
In June 2021, El Salvador became the first country in the world to adopt bitcoin as legal tender, with legislation to take effect in September. Until June 2021, Bitcoin was legal in the US, Japan, UK. and most other developed countries. While China imposed heavy restrictions on bitcoin without actually criminalizing the holding of bitcoin. India banned banks from transacting in bitcoin and left the overall legal status of the cryptocurrency unclear.
Major risks involved
I hope you know about Tesla. Tesla began accepting Bitcoin as payment in February this year. But in May it retracted from its earlier comments. Tesla made this decision because of the environmental impact of bitcoin mining. Therefore, energy consumption and its environmental impact are even greater risks than evergreen highly speculative nature, because it is already causing concern among regulators and investors. However, according to recent updates, it seems that bitcoin is shifting heavily towards renewable energy.
As I mentioned, the highly speculative nature is one of the evergreen risks, and not only with bitcoin but with all cryptocurrencies. Thousands of businesses are accepting Bitcoin, but most sellers are still maintaining a safe distance from it. So no one knows whether bitcoin will eventually be widely accepted. And if it doesn’t become mainstream, it may eventually become useless.
It is a blockchain technology that hosts a native coin called Ether. It is one of the biggest names in the market and a variety of projects are hosted on the Ethereum blockchain. Defi and NFT based projects use the Ethereum blockchain.
It is an open-source technology, so developers are free to create new applications on the blockchain. It is worth mentioning that if an Ether based project succeeds, Ether will benefit from it. With Smart Contract and many more features, Ethereum is growing at a rapid pace.
Major risks involved
As I said above, a highly speculative nature is the major risk with every cryptocurrency. So there’s no guarantee that Ethereum will become widely adopted. Bitcoin has an advantage in this department from the beginning.
Another problem with Ethereum is that even though blockchain is considered a revolutionary technology, if the blockchain fails, Ethereum could be at a loss.
Which one should you choose in 2021?
To become a successful cryptocurrency, a cryptocurrency must have widespread adoption among vendors. Bitcoin already has an advantage in that department. According to online sources, more than 15,000 companies worldwide accept bitcoin as a form of payment, and the more merchants adopt bitcoin, the more likely it is to become the mainstream of payment. Thus, Bitcoin has a solid position and a great future scope in the market.
Thus, Ethereum may have more growth opportunities over time, but for now, Bitcoin carries less risk and has a longer track record and better name recognition. So, Bitcoin seems to be a safer choice for investment this year. Even with all the facts and figures, don’t invest blindly, do your research and reach out to our team at Hivelly.com to introduce you to our Exchange and community who will offer guidance and the platform to support you in achieving your investment goals.