Bitcoin vs. Ethereum: Which crypto is the better 2021 investment?

Bitcoin vs. Ethereum: Which crypto is the better 2021 investment?

Bloomberg

(Bloomberg) – Gas stations along the U.S. East Coast are beginning to run out of fuel as North America’s biggest petroleum pipeline races to recover from a paralyzing cyberattack that has kept it shut for days.From Virginia to Florida and Alabama, stations are reporting that they’ve sold out of gasoline as supplies in the region dwindle and panic buying sets in. An estimated 7% of gas stations in Virginia were out of fuel as of late Monday, according to GasBuddy analyst Patrick DeHaan.The White House said in a statement it is monitoring the situation and directing government agencies to help alleviate any shortages. Colonial Pipeline Co. said it’s manually operating a segment of the pipeline running from North Carolina to Maryland and expects to substantially restore all service by the weekend.The Colonial pipeline has been shut down since late Friday. On Monday, the Federal Bureau of Investigation pointed the finger at a ransomware gang known as DarkSide. While President Joe Biden stopped short of blaming the Kremlin for the attack, he said “there is evidence” the hackers or the software they used are “in Russia.”Colonial Chief Executive Officer Joe Blount and a top lieutenant assured Deputy Energy Secretary David Turk and state-level officials that the company has complete operational control of the pipeline and won’t restart shipments until the ransomware has been neutralized.The dwindling supplies come just as the nation’s energy industry was preparing to meet stronger fuel demand from summer travel. Americans are once again commuting to the office and booking flights after a year of restrictions. Depending on the duration of the disruption, retail prices could spike, further stoking fears of inflation as commodity prices rally worldwide.The U.S. East Coast is losing around 1.2 million barrels a day of gasoline supply due to the disruption, according to a note from industry consultant FGE.In Asheville, North Carolina, Aubrey Clements, a clerk at an Exxon Mobil station answered the phone with “Hello, I’m currently out of gas.” The Marathon gas station in Elizabethtown, North Carolina, had roughly two dozen cars waiting to fuel up, said an employee there. Drivers pulling into a station with a sign offering unleaded gasoline for $2.649 per gallon in Manning, South Carolina, were met with pumps covered in yellow and red “out of service” bags.Shortages are also hitting the aviation industry, forcing American Airlines Group Inc. to add additional stops to two long-haul flights originating from Charlotte, North Carolina. Airlines flying out of Philadelphia International Airport are burning through jet-fuel reserves and the airport has enough to last “a couple of weeks,’ a spokeswoman said.In an 18-minute virtual meeting, Blount said Colonial is working with refiners, marketers and retailers to prevent shortages, according to a person involved with the meeting who wasn’t authorized to speak publicly about the discussion. The pipeline serves 90 U.S. military installations and 26 oil refineries, the person said.The shutdown has prompted frenzied moves by traders and retailers to secure alternative supplies. Oil tanker charter rates skyrocketed in the U.S. with refiners scrambling for ships to store fuel that has nowhere to go.Emergency shipments of gasoline and diesel from Texas are already on the way to Atlanta and other southeastern cities via trucks, and at least two Gulf Coast refineries began trimming output amid expectations that supplies will begin backing up in the nation’s oil-refining nexus.The national average retail gasoline price rose to $2.967 a gallon on Monday, a 2.4% increase from Friday, according to AAA. The premium for wholesale gasoline in the New York area expanded to its widest in three months.Gasoline futures that initially surged as much as 4.2% earlier this week have since declined. Futures prices had gained more than 50% this year, helped by the recovery from the pandemic.The event is just the latest example of critical infrastructure being targeted by ransomware. Hackers are increasingly attempting to infiltrate essential services such as electric grids and hospitals. The escalating threats prompted the White House to respond last month with a plan to increase security at utilities and their suppliers. Pipelines are a specific concern because of the central role they play in the U.S. economy.Ransomware cases involve hackers seeding networks with malicious software that encrypts the data and leaves the machines locked until the victims pay the extortion fee. This would be the biggest attack of its kind on a U.S. fuel pipeline.DarkSide said in a post on the dark web that it wasn’t to blame and hinted that an affiliate group may have been behind the attack. The group promised to do a better job of screening customers that buy its malware.Government officials haven’t advised Colonial on whether it ought to pay the ransom, Deputy National Security Adviser for Cyber and Emerging Technologies Anne Neuberger said during a briefing.Learn more about how emergency powers can counter fuel-supply disruptions.“It’s an all-hands-on-deck effort right now,” said U.S. Commerce Secretary Gina Raimondo. “We are working closely with the company, state and local officials to make sure that they get back up to normal operations as quickly as possible and there aren’t disruptions in supply.”The White House pulled together an inter-agency task force to address the breach, including exploring options for lessening its impact, according to an official. Biden can invoke an array of emergency powers to ensure supplies keep flowing to big cities and airports along the East Coast.Some rules curbing domestic transportation of fuel have been eased to help deal with any shortages. That doesn’t extend to waiving the Jones Act, a measure that would allow foreign tankers to help shuffle more petroleum products between U.S. ports.The Northeast can secure gasoline shipments from Europe but it will come at an increasing cost the longer the pipeline stays shut. In the meantime, fuel producers including Marathon Petroleum Corp. are weighing alternatives for how to ship their products to the Northeast.Landlocked cities face the greatest danger of fuel shortages compared with those with access to water-borne deliveries, said Steve Boyd, senior managing director at Houston-based distributor Sun Coast Resources Inc. If the pipeline remains down for many more days, he’s anticipating a “massive surge” in orders.(Adds Virginia situation in second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Crypto Fundamentals: The Top 3 Cryptocurrencies Explained

Bitcoin, Ethereum, Dogecoin, Tether, Polkadot. With so many crypto assets grabbing headlines these days, it can be hard to keep them all straight.

Here we break down the top 3 cryptocurrencies by market capitalization, as reported by CoinMarketCap, as of the time of writing.

What the Top Cryptocurrencies Have In Common

To best understand the differences between cryptocurrencies, it is easiest to start with what they have in common.

Each crypto asset is basically computer code. It works by utilizing a private key, compromised of a string of random numbers and letters, that unlocks a virtual vault with your assets in them, whether cryptocurrencies, NFTs, or anything else that the particular blockchain is configured for.

These private keys are tracked on a blockchain, which is essentially a virtual ledger that records every transaction that has ever happened: Person A gives one Bitcoin to person B, who gives it to person C, ad infinitum.

For cryptocurrencies like Bitcoin, that blockchain is used to track a digitized, decentralized payment network. Recording and verifying transactions requires the computational power of a specialized computer or computer network known as a “mining rig.”

Bitcoin

Bitcoin (BTC) was the first cryptocurrency to debut, and it remains by far the largest and most widely traded. Its current market cap is over $1 trillion.

The concept first appeared in a white paper in 2009 by an individual (or individuals) under the pseudonym Satoshi Nakamoto.

When Bitcoin was created, a 21 million coin limit was implemented, ensuring scarcity and protecting against inflation, and for every 210,000 transactions mined, the reward for verifying new Bitcoin transactions is cut in half.

See also: The Race to the First Bitcoin ETF

Bitcoin is one of the few cryptocurrencies accepted as payment by companies such as Paypal, Microsoft, AT&T, and Tesla, with Bitcoin being most widely accepted as an alternative form of payment. Its biggest competitor at present is Ethereum.

Ethereum

Ethereum (ETH) is the second most widely traded cryptocurrency, with a market capitalization of $459 billion.

The Ether token that is carried by the Ethereum network is traded similarly to Bitcoin, but that’s where the similarity ends.

Ethereum it is not solely a cryptocurrency like Bitcoin. It is also a “smart contract” platform, which hosts programs that can run using the Ethereum blockchain. These programs can in turn send transactions over the blockchain, allowing for a marketplace of decentralized apps.

As such, Ethereum has fast become synonymous with “DeFi” or decentralized finance, a digital space where the crypto economy thrives. Investors can buy, sell, and trade on the Ethereum network.

Unlike Bitcoin, Ether currently has no supply cap.

Binance Coin

Binance Coin (BNB) was introduced in 2017 by Binance, the world’s largest crypto exchange. Binance Coin currently has a market capitalization of $101 billion.

First introduced as an Ethereum-based token, it was later moved to its own blockchain known as the Binance Chain Blockchain.

As such, Binance Coin is an incentivized method of payment within the Binance network: the crypto exchange offers a rebate for Binance Coin for signing up for membership.

The crypto asset is primarily utilized within the Binance exchange as an alternative way to pay fees incurred when trading on the exchange.

Binance Coin caps its supply at 200 million tokens. Binance plans to burn half this supply over time to combat depreciation of the token.

For more news, information, and strategy, visit the Crypto Channel.

Bitcoin or Ether: Which Crypto Is a Better Investment?

In almost every new industry, we have a ferocious rivalry: Microsoft vs. Apple, Uber vs Lyft, or Pepsi vs. Coke. And cryptocurrency is no exception.

Bitcoin (BTC) has the first-mover advantage and is the “face of cryptocurrency.” For many years, crypto never had a serious contender to compete with Bitcoin. Bitcoin held about 90% of the crypto market value in 2013, but the competition is heating up now.

It all started when a 20-year-old Russian-Canadian named Vitalik Buterin won a grant of $100,000 from the Thiel Fellowship. As a result, he dropped out of college and launched a platform that allows app development on the blockchain known as a “daap.” This platform is now called Ethereum (ETH). Ethereum shot up to become a serious competitor, and in only five months, captured a big chunk of the market share in cryptocurrency.

Here are the current market shares between these behemoth cryptos.

January 2021: Bitcoin held roughly 68% of the market cap versus Ethereum’s 10%

Bitcoin held roughly 68% of the market cap versus Ethereum’s 10% May 2021: Bitcoin held 42% versus Ethereum’s 19%

Three Key Differences Between Bitcoin and Ethereum

Keep in mind, Bitcoin and Ethereum are different. Ethereum wasn’t originally created to compete against Bitcoin. Rather, it was designed as a De-Fi platform. Almost by accident, the popularity of its platform drove Ethereum’s coin (Ether) to become the 2nd largest cryptocurrency in the world. Here are three key differences between both coins:

#1: Currency vs. Platform. Bitcoin established itself as a credible alternative to traditional fiat currencies. So, Bitcoin is a pure cryptocurrency that focuses primarily as a medium of exchange and a store of value.

On the other hand, Ethereum is built as a platform to run programmatic contracts and applications via its own currency: “Ether is a blockchain platform that functions like the Apple store or Android app store. Bitcoin is a commodity like gold, or a store of value,” said Pat LaVecchia, chief executive officer of Oasis Pro Markets.

#2: Security vs. Speed. Bitcoin is far slower than Ethereum in two key metrics:

42x Longer To Release Blocks. Ethereum block times are currently at about 14 seconds, compared to Bitcoin’s 10 minutes.

Ethereum block times are currently at about 14 seconds, compared to Bitcoin’s 10 minutes. 8x Slower Than Ethereum. A bitcoin transaction will show up in about 40 minutes, while it takes Ether about 5 minutes to complete a transaction.

Now, why is Bitcoin so slow? Well, security is Bitcoin’s first priority, and it is secure due to its coding language. Bitcoin uses C++ programming and is restricted to only 70 specific commands. This limitation makes it more difficult to hack the blockchain within these set commands. Ethereum is an evolving platform that is still finding its identity. For example, Ethereum 2.0 is expected to release this summer and will have completely different rule sets.

#3: Finite Supply vs. Infinite Supply. Bitcoin has a finite supply of 21,000. Once the supply is exhausted, that’s it. That’s why investors consider bitcoin as a store of value and investment against inflation. Contrary to Bitcoin, Ethereum offers an unlimited number of Ether but does cap the amount released each year.

The Case for Ether

Some investors love Ethereum because its platform is evolving to adapt to the current needs. If you invest in Ether, you’re betting on the future of its blockchain platform. Phil Bonello, director of research at Grayscale Investments, said: “Investors often look at Ethereum as a growth-type investment, making a bet on the continued development of the decentralized ecosystem built on Ethereum.”

Have you heard of NFTs? Of course, you do. Beeple auctioned off his NFT art, called “Everydays: The First 5000 Days,” for a mind-boggling $69 million. And where was the NFT hosted at? You guessed it. Ethereum is the blockchain that hosts NFTs like Beeple’s arts. What’s more, the record-setting NFT art was paid in Ether. NFT is just one example of Ethereum’s unlimited possibilities. It allows users to trade assets and borrow and lend money directly with one another without involving banks.

Alex Adelman, the CEO of Lolli, described Ethereum: “When people compare Bitcoin and Ethereum it’s a bit like comparing gold with electricity. They are both valuable but have very different uses. Ethereum is infrastructure. It is a blockchain that is in the early days but has the potential to revolutionize finance and technology.”

The Case for Bitcoin

As a crypto asset, Bitcoin is the undisputed leader. When people think of cryptocurrency, Bitcoin often comes first to the mind. This type of brand recognition is nearly impossible to penetrate, much like Advil owning the word of Ibuprofen. Big corporations such as Tesla, Square, and MicroStrategy hold Bitcoin on their balance sheets. Institutional support can provide more liquidity and more stable prices.

Jason Yanowitz, the co-founder of Blockworks, argues that Bitcoin holds a huge advantage as the standard currency. And he points out that there is no guarantee that Ethereum will hold its leadership in DeFi platforms: “Today, Ethereum powers most of the DeFi (decentralized finance) platforms, but in the near future, we’ll be able to build DeFi platforms on top of Bitcoin thanks to layer 2 solutions. Eventually, Bitcoin will become both the global standard of value and the monetary settlement layer of the world.”

The biggest drawback about Ether is that its currency relies on how prosperous Ethereum becomes. If the platform becomes unpopular, Ether’s value can decline.

Bottom Line

Arguably, Ether could have a bigger upside with its DeFi platform – which is only limited by developers’ imagination. But the risk is higher.

Bitcoin is the leader of cryptocurrency, and billion-dollar corporations prefer to hold Bitcoin as a store of value. Because of its first-mover advantage and brand recognition, Bitcoin can be considered safer than Ether. But keep in mind, all cryptos historically are volatile.

Cornerstone Macro analysts wrote to their clients: “Given that there are diversification opportunities among digital coins themselves, we should consider a small basket of them, rather than just Bitcoin alone, when we assess whether some allocation to crypto assets can reduce portfolio volatility alongside traditional assets.”

Instead of betting on one crypto asset, an investor can diversify its crypto portfolio with both Ether and Bitcoin.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.