Cryptocurrency has witnessed a massive surge in the past few years. Several large-scale business organizations are accepting cryptos as the authorized modes of payment.
This year, cryptocurrencies have already taken off. Let’s look at Bitcoin and Ethereum, the two most prominent players in the crypto market, and analyze which one is a better investment.
Bitcoin is known as the ‘face of cryptocurrency’. For several years, Bitcoin has been tough to beat and did not face a serious competitor. But with the emergence of more affordable and new cryptocurrencies, the competition has not been the same.
Currently, the global cryptocurrency market capital stands at US$2 trillion. Bitcoin’s price is US$39376.80, and that of Ethereum is US$2876. According to reports, in May 2021, Bitcoin was up by 98% to just over US$57000 by the end of the day on May 10; leading up to a 30% gain. But the second-largest cryptocurrency is growing much faster than Bitcoin. Ethereum is up by 434% to just over US$4000 and is gaining ground swiftly.
So why is Ethereum surging?
- It runs automated contracts: Ethereum runs automated contracts. These contracts are coded and can execute themselves automatically under certain conditions. Automated contracts also engage non-fungible tokens (NFT), whose sales have surged this year. NFTs enable artists and musicians to gain profit for the work they produce. It also contains copyright and royalty information.
- Eth 2– Ethereum’s upgrade Eth-2 is an awaited platform that is being deployed in phases. It will make Ethereum more scalable, secure, and sustainable to use.
- Ethereum is a Defi platform: Decentralized finance is a blockchain application that has grabbed attention this year. It allows its users to lend, borrow and earn interest on the money without the help of banks. And since Ethereum is a programmable blockchain, 80% of the decentralized apps are developed on Ethereum.
So will Ethereum cross Bitcoin?
Over the years, Bitcoin’s growth has been extraordinary. But the market has changed ever since, and Ethereum now is a strong competitor against Bitcoin. Ethereum is six years old, and its current market value is over US$3000, whereas Bitcoin was valued at around US$250.
Ethereum has the potential to grow after implementing Eth 2 and the growing use of smart contracts. This platform will meet more market demands and trends and move towards environment-friendly mining.
The Cryptocurrency market is volatile. Investments have to be careful. If an investor buys Ethereum and the market falls, Bitcoin value will also go down the same way. There will a massive change in the crypto market if Ethereum takes over Bitcoin, hence, all investment decisions have to be made considering the change in the global crypto market.