Although both $BTC and $ETH are currently around 75% off their all-time highs (hit in November 2021), some recent tweets and articles about these two cryptocurrencies suggest that the general perception in the crypto community is the latter is probably a better long-term bet.
It’s hard to say definitively if ether (ETH) is a better long-term bet than bitcoin (BTC). Both cryptocurrencies have their own unique characteristics and have historically performed well, and it is ultimately up to the individual investor to decide which one better suits their investment goals and risk tolerance.
One argument for ether as a long-term investment is its potential for broader adoption. While Bitcoin is primarily used as a store of value and medium of exchange, Ether has the additional use case of running smart contracts on the Ethereum platform. This makes Ether an attractive investment for those who believe in the potential of decentralized applications (dApps) and the wider adoption of blockchain technology.
Another argument for Ether is its strong developer community and support. Ethereum has one of the largest and most active developer communities in the cryptocurrency space, which has contributed to the continued development and growth of the platform. This strong community support can offer Ether investors a degree of stability and security.
However, it is worth noting that Bitcoin also has a strong developer community and has proven to be a resilient and secure cryptocurrency over the years. Bitcoin has the advantage of being the first and most well-known cryptocurrency, giving it a level of brand awareness and mainstream visibility that ether does not yet have. Additionally, Bitcoin has a limited supply of 21 million coins, giving it a level of scarcity that can make it a more attractive store of value for investors.
On Thursday (January 5, 2023), Mike McGlone, a Senior Macro Strategist at Bloomberg Intelligence (Bloomberg’s research arm at Bloomberg Terminal), shared his outlook for Bitcoin and Ethereum.
In the January 2023 issue of Bloomberg Intelligence’s Crypto Outlook report, McGlone (and the two contributing analysts he worked with on this study) said:
“Ethereum’s bullishness against Bitcoin has not been shaken by 2022 deflation for most risk assets and may be gaining underpinning. With a ratio of around 0.07, the Ethereum/Bitcoin cross rate is the same as it was in May 2021, when the Nasdaq 100 Stock Index was up around 20%.
“Our chart shows the ongoing trend of crypto #2 outperforming #1, coinciding with the surge in risky assets. The roughly 30% drop in the index in 2022 is part of a receding tide, including a roughly 70% drop in Ethereum. The migration to the mainstream is our conclusion, and once the dust settles on some risk asset reversal amid inflationary pressures, it seems more likely that Ethereum will resume what it has been doing – outperforming.”
The popular pseudonymous host of crypto market analysis show Coin Bureau says if the Shanghai upgrade goes well, “2023 could be a really big year for Ethereum and for ETH.”
According to a report by The Block, a tentative timeline for completing the Shanghai upgrade, also known as Ethereum Improvement Proposal (EIP) 4895, was set at Ethereum Core Devs Meeting #151, which took place on December 8, 2022. This upgrade allows users to withdraw their wagered funds from the Ethereum blockchain, a feature that is currently unavailable. According to Cointelegraph, “For May or June 2023, developers will roll out the Ethereum Improvement Protocol (EIP) 4844 upgrade, which will introduce proto-thanksharding to the network.”
Last month, the Coin Bureau released a video update (titled “Q&A: ETH Predictions, BTC & Crypto Market in 2023!”) and according to a report by The Daily Hodl, the show’s host had this to say about the potential implications of that upcoming network upgrade in Shanghai and the general outlook for Ethereum in 2023:
“If they see ETH actually being unstaked and easily sold, that might encourage them to actually stake. So I really think it could go either way. Well, I wouldn’t be at all surprised if it’s slightly down near term if we see some selling. But I think the future for ETH is so, so bright and I think Shanghai, assuming it goes smoothly like the merger did, then 2023 could be a really big year for Ethereum and for ETH…
“Price prediction, I don’t know… I don’t think we’re going to see five-digit ETH in 2023, but I think it’s entirely possible. We could see a flip, of course, but I’m not sure. I expect a very strong sideways movement for ETH over the next year.”
On August 19, 2022, Real Vision founder and CEO Raoul Pal said on Twitter that while he doesn’t expect Ether price to make “new lows” (i.e., check below the 18-quickdrop low”; He however, also noted that “new lows” mean he will buy even more $ETH as he finds Ether’s “2-year risk/reward” quite attractive.
Essentially, Pal believes that worst-case scenario, $ETH could fall into the $800-$900 range, but the upside potential is much greater as – as he has said in the past – he expects $ETH price to rise in the next few years will reach $ 20,000 .
Ah, the old cheeky pre-merge crypto cleanup I’m seeing… I’m not expecting any new lows, but most likely a quick drop, but we’ll see.
New lows = keep adding (for me) as the 2 year risk/reward becomes really, really attractive
50% down vs possible 10x up = 20:1 R/R#ETH #BTC
— Raoul Pal (@RaoulGMI) August 19, 2022
A popular crypto analyst who agrees with Pal’s view that Ethereum will outperform Bitcoin over the next few years is Ben Armstrong, who told his 880,000+ Twitter followers that he expects $ETH to have a higher market cap than $BTC by 2025:
2017: Ethereum outperformed Bitcoin
2021: Ethereum has outperformed Bitcoin
2025: This time it will be different
Yes, it will be different. Because $ETH will have a higher market cap than $BTC in 2025
— Ben Armstrong (@Bitboy_Crypto) August 19, 2022
Of course, there are those who believe that bitcoin may actually be the best store of value and that the price of a bitcoin could easily reach $1 million in the next 10 years as this view becomes more widespread (something Cathie Wood, CEO of ARK Invest, believes) and maybe even reach as high as $23 million (as Blockware Solutions seems to think).
Regardless of which of these two cryptocurrencies has more upside potential over the long term, one thing seems indisputable is that bitcoin has much higher regulatory clarity than ether in the US, as both former SEC Chair Jay Clayton and current SEC Chair Gary Gensler have confirmed on multiple occasions that they view Bitcoin as a commodity rather than a security and are therefore outside their purview. Unfortunately, the same cannot be said about ether.
Aside from what William Hinman, a former director of the SEC’s corporate finance division, said during a speech in June 2018, the SEC’s position is that it has never in any official way stated that Ethereum is a commodity or security , meaning it’s possible (especially if Ripple Labs loses the ongoing lawsuit the SEC brought against them in December 2020) that any day in the future, the SEC could decide to declare Ether a security, with a huge negative impact on its price as crypto exchanges in the US would then have to delist it.
So while we cannot be sure which of these two cryptocurrencies is the better long-term bet in terms of upside potential, at this stage, given the lack of regulatory clarity we currently have in the US, the safer long-term term bet appears to be bitcoin.
It is important that investors carefully consider their individual goals and risk tolerance before making a decision. It can be helpful for investors to diversify their portfolio by including ether and bitcoin as well as other cryptocurrencies and traditional assets. It is also important for investors to be aware of the inherent risks of investing in cryptocurrencies and to carefully research and understand the assets they are considering before investing.
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