Which is a good investment: Bitcoin or Ethereum?

Despite the famously unstable nature of the cryptocurrency industry, Bitcoin (BTC -0.29%) and Ethereum (ETH -0.16%) have become the two best choices for investors seeking a degree of security. The two currencies with the greatest track histories, a proven ability to weather market downturns, and the greatest liquidity are Bitcoin and Ethereum. These two coins make up about 60% of the market cap of all cryptocurrencies.

Furthermore, as Coinbase Global (COIN 2.60%) notes in its brand-new 2023 Crypto Market Outlook Report, things are probably going to stay pretty much the same in 2019. In 2023, investors will continue to pour money into Bitcoin and Ethereum as a result of a widespread flight to quality during a challenging macroeconomic period, claims Coinbase. But which one, if you had to pick just one, would be better for your portfolio？

Furthermore, as Coinbase Global (COIN 2.60%) notes in its brand-new 2023 Crypto Market Outlook Report, things are probably going to stay pretty much the same in 2019. In 2023, investors will continue to pour money into Bitcoin and Ethereum as a result of a widespread flight to quality during a challenging macroeconomic period, claims Coinbase. But which one, if you had to pick just one, would be best for your portfolio？

Select Bitcoin

The potential for mind-blowing long-term portfolio gains is, of course, the main draw of investing in Bitcoin. With annualized gains of 230% over the ten-year period from 2011 to 2021, Bitcoin was the world's best performing asset overall. This outperformed even riskier, high-growth tech equities by a factor of ten. Although past performance is by no means a guarantee of future results (as was seen in 2022), this kind of historical track record is unquestionably alluring. That gives me hope that Bitcoin will be able to overcome a terrible 2022, in which it is lost over 65%. In two of those years, Bitcoin delivered extremely atrocious performance (down 58% in 2014 and 73% in 2018).

Long-term, Bitcoin's appeal as an online payment option is also strong. There is undoubtedly a growing call for virtual currencies amid all the hype of a “cashless society” and the launch of new central bank digital currencies (CBDCs) everywhere. And of all the major cryptocurrencies, Bitcoin has the best chance of profiting from this long-term trend. Although there are now only a few ways to pay using Bitcoin, some finance experts believe that soon everyone will be using it to purchase anything online. When that occurs, the value of Bitcoin will increase.

Select Ethereum

Based on anticipated growth prospects, Ethereum presents a similarly alluring picture. The Ethereum blockchain is currently serving as the fundamental layer for quick advancements happening in fields like contracts, decentralized finance (DeFi), gaming, the metaverse, Web3, and non-fungible assets (NFTs). As a result, a thriving environment for Ethereum users and creators has been developed. In fact, tokens built on top of the Ethereum blockchain are among the most expensive currencies.

This expansion in so many various blockchain and cryptocurrency-related sectors offers the certain level of safety and much-needed variety from the perspectieve of portfolio diversification. Yes, the NFT industry may be in a state of collapse right present, but the game and metaverse sector is primed for growth. Because Ethereum is so widely diversified, there is less danger even if investing in cryptocurrencies is always hazardous.

From the perspective of asset allocation, this growth in so many diverse blockchain and cryptocurrency-related industries provides a certain level of safety and much-needed variety. Yes, the NFT sector may currently be in a state of collapse, but the game and metaverse industry is well-positioned for expansion. Ethereum is so extensively spread that there is less risk even if cryptocurrency investing is always risky.

As a reminder, WikiBit is ready to help you search the qualifications and reputation of projects in a bid to protect you from hidden dangers in this risky industry!

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