Bitcoin vs. Ethereum: 10 experts told us which asset they'd rather hold, and why

Bitcoin vs. Ethereum: 10 experts told us which asset they’d rather hold, and why

Bitcoin vs. Ethereum Getty Images AsiaPac

Bitcoin and ether are the top two cryptocurrencies by market cap.

They may be very different, but investors often choose between holding one or the other.

Insider asked 10 experts which crypto they’d rather hold for the next 10 years and why.

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Bitcoin has long been the dominant cryptocurrency, but recently Ethereum’s native token, ether, has emerged as more than just a clear number two.

In 2021, ether has made gains on bitcoin in terms of market cap, and investors are taking note.

While the two cryptocurrencies are very different in terms of their architecture and use cases, both are top options for cryptocurrency investors long-term.

With that in mind, Insider decided to reach out to the experts to see which cryptocurrency they believe offers the most upside over the long haul.

We asked crypto industry CEOs, analysts, co-founders, and more which asset they’d rather hold for the next ten years and why.

Here’s what they had to say.

Bitcoin Bulls

1. “We are strong believers in both Bitcoin and Ethereum. That being said, if we absolutely have to choose… we would prefer holding Bitcoin over Ethereum for the next few years. While Ethereum leads in terms of innovation and current use cases, Bitcoin leads in terms of security and proven track record. Most importantly, we believe it’s a great store of value and has all the properties of a reserve asset.” - Peter Wall, CEO of Argo Blockchain

2. “Bitcoin will be as transformative for money as the Internet was for information. By mid-2028, bitcoin’s market cap will overtake gold’s market cap, demonstrating that it is the best store-of-value asset for a digital-first world. But it doesn’t stop at store-of-value. Bitcoin is both a decentralized monetary settlement network and a digitally scarce asset. 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. For these reasons, I have put most of my liquid assets into Bitcoin, not Ethereum.” - Jason Yanowitz, Co-founder of Blockworks

3. “Bitcoin is strengthening its position as a store of value and the narratives around BTC as “hedge against potential inflation” and “potential replacement for gold” is becoming more clear. With all the big firms entering the space with multiple financial institutions starting to hold BTC on their balance sheet, there is more upside and price will be driven mostly by increased participation in the ecosystem.” - Ken Nakamura, CEO of GMO-Z.com Trust Company

4. “To me, it’s a no-brainer. Bitcoin is the name brand everyone knows and has proven its staying power. Ethereum is the New Kid on The Block and challenger. ETH has been sold as having mystical practical applications, but in reality, it’s inefficient, struggles to operate at scale, and is not a hedge against inflation.” - Jamie Finn, President & Co-founder of Securitize

Read more: Fundstrat’s head of digital assets research walks us through his $100,000 and $10,500 year-end price targets for bitcoin and ether - and shares the 8 tokens he’s bullish on

Ethereum Holders

1. “I do believe the potential upside on Ethereum tends to be a bit greater from its utility, functionality, and ecosystem. Voyager’s customers, who own both Bitcoin and Ethereum, have shifted their cryptocurrency allocations in the past few months to increase their Ethereum holdings, on which they can earn 5.25% interest APR. We’re also seeing our larger investors more comfortable taking on Ethereum’s risk and reward profile. The Ethereum blockchain powers the most established ecosystem for decentralized finance, utility tokens, and NFTs, all of which are gaining mainstream traction. Ethereum will also be soon undergoing an upgrade that will accelerate the speed of ETH transactions, reduce transaction fees, and restrict its circulating supply.” - Steve Ehrlich, CEO, and founder of crypto-asset broker Voyager Digital

2. “The technological advantage and utility of Ethereum blockchain is far greater than that of Bitcoin, and I think investors are noticing that, as well. There are over $75 billion currently locked in DeFi projects on the Ethereum blockchain, and only 30 days ago, it was $40 billion. For those that believe in the demand of DeFi for services like lending, borrowing, trading, insurance, monetary issuance, they should be paying more attention to the Ethereum blockchain. It’s a network that supports smart contracts…they alone carry limitless potential and should be enough for Ethereum to have a competitive advantage over bitcoin and its applications in our everyday lives. I’m in the Ethereum camp.” - Tally Greenberg, Head of Business Development at Allnodes

3. “Institutional investor recognition of ETH as a real and valuable asset has been long-awaited and anticipated. I foresee the current trend of Ethereum’s price increase gaining more momentum, leading to a shift in capital flowing into Ethereum - as investors become educated on what Ethereum is and how the technology is going to shape the future…Technicals and fundamentals show there is greater long term upside potential for ETH than BTC…Most banks, institutions, and investment funds have mandated investments towards clean, environmentally sustainable industries and technologies. Concerns on how and where the majority of bitcoin is mined today could negatively impact the assets price long term…Ethereum’s upcoming network upgrades, EIP1559 and Proof-of-Stake, will make ETH a deflationary asset while providing a reduction in gas fees and reducing the total supply Ethereum. When these two shifts occur, they could push Ethereum over the $1T market cap. Whether Ethereum’s network changes ignite a supercycle or not, the asset undoubtedly has 5X more developers, more on-chain activity, and exponentially more active use cases than any other chain.” - Megan Kaspar, Managing Director of Magnetic

4. “I think Bitcoin will always have some level of acceptance being the flagship crypto and a perceived store of value within the space. However, the blockchain technology of Ethereum having more applicability and functionality (including recent smart contracts for NFTs) makes it potentially more of an attractive longer-term play. Also, the current price disparity between the two might make Ethereum seem more affordable to the average investor as well.” - Ed Egilinsky, Managing Director - Head of Alternative Investments at Direxion

Why not both?

1. “The world can be broadly split into traders and investors. Traders focus on short-term price movements and arbitrage opportunities and rightly are excited by Bitcoin versus Ethereum relative movements right now. Investors focus on what the future will be like, what are the tailwinds driving projects forward, and how value will be captured by some and lost by others. For investors, BOTH Bitcoin and Ethereum need to be in your portfolio right now…Bitcoin has a chance of remaining the leading crypto asset in the world, while Ethereum has a chance of remaining the leading distributed software development platform in the world. Both positions of leadership would capture trillions of dollars of value in ten years' time. So invest in both now.” - Matthew Le Merle, Chairman of Blockchain Coinvestors

2. “Bitcoin’s market cap as of last week has fallen below 50% of the crypto market for the first time since 2019 and is down over 30% overall since January. In our work with large institutions, we’re seeing increased demand for Bitcoin and Ethereum as well as alternative coins. We believe institutional investors and corporate treasuries will hold onto both BTC and ETH assets, as their adoption and the market matures.” - Raghu Yarlagadda, CEO of FalconX

Ethereum emerges from Bitcoin’s shadow

Standing on stage before the Bitcoin elite in Miami, 19-year-old Vitalik Buterin began his pitch for what he envisaged to be the future of the internet and digital currencies.

The gifted Russian programmer carefully laid out his plans for Ethereum, a cryptocurrency technology that he believed would enable millions of apps to operate in a fully decentralised way – meaning they would not be controlled or owned by any one person.

“Bitcoin is very good for transferring money,” he said, “but it was not designed as a layer for protocols to be built on top.”

The cryptocurrency of the Ethereum network, Ether, is now worth more than £287bn. Its price has risen more than 1,500pc in the past year with each coin trading at around $3,500 (£2,520).

Its rise is impressive when compared to Bitcoin, the world’s biggest crypto asset, which has seen its value increase by more than 480pc in the past 12 months. One Bitcoin is now worth close to $60,000.

Full Steam Ahead: Ethereum Blockchain’s Ether (ETH) Now Likely To Top $9,000

Ethereum ‘s Ether (ETH), the second-largest cryptocurrency after Bitcoin (BTC), is exhibiting extraordinary momentum these days, having recorded a gain of over 85 percent in just the past 30 days. With its inexorable march to new all-time highs, Ether is now likely to surpass its previous zenith relative to Bitcoin.

A host of fundamental changes to the Ethereum blockchain are aligning to strengthen Ether’s bullish case

A confluence of developments is bolstering Ether’s upward momentum. First, the Ethereum blockchain is about to undergo its most significant overhaul in years. As an illustration, the Ethereum Improvement Proposal (EIP) 1559 will go live with the London hard fork in July. As a refresher, a hard fork is a radical change to a blockchain’s protocol that makes previously invalid blocks and transactions valid. So, what is crucial about the EIP 1559? Well, under the existing dispensation, miners receive a fee from Ethereum users when a transaction is added to a block. This is, in effect, a transaction fee. The EIP 1559 will now automate the calculation of a base transaction fee based on the network activity. Thereafter, the transaction fee, which is paid in Ether, will be destroyed. This will reduce the annual addition to Ether’s supply from the current 5 percent to just 1 to 2 percent. As per the rules of economics, when supply decreases, the price must increase if all else remains equal. Consequently, the EIP 1559 proposal is expected to provide a solid boost to Ether’s price.

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It is an established fact that mining is an energy-intensive activity. Consider the fact that Bitcoin mining consumes as much energy as that of a mid-sized country. Now, the Ethereum 2.0 – dubbed Serenity – is set to take this problem head-on. The major upgrade is intended to improve the speed, efficiency, and scalability of the Ethereum network and is currently being implemented in phases. Expected to be completely in place by the end of 2022, Ethereum 2.0 will incorporate two fundamental changes – sharding and staking. Under sharding, the Ethereum blockchain will be broken into distinct “shards”. Each shard would act as an independent blockchain, hosting its own smart contract blocks. Within a shard, notaries – known as miners on other blockchains – would be selected randomly to vote on the validity of new shard blocks. These votes would be reviewed by a committee, and then the shard blocks would be merged with the main Ethereum chain. This, in effect, solves the scalability issue. Since every node will not be required to process/validate new transactions, the efficiency of the entire Ethereum network will improve dramatically, eventually having the capacity to process 10,000 transactions per second vs. the current rate of only 30 transactions per second.

The Ethereum 2.0 will also abandon proof of work (mining) in favor of proof of stake (staking) mechanism. Currently, in order to validate transactions and produce new blocks, miners have to expend computational power – by performing cryptographic calculations based on the hash rate – in order to forge consensus and discourage spamming or the frivolous use of the network. The miners then earn a reward (paid in Ether) for processing these transactions. Under the proof of stake mechanism, however, these “miners” will now just need to demonstrate how much Ether they own. To do this, a miner can create multiple master nodes, with each such node locking up a certain amount of Ether. The transaction processing rewards will then be distributed according to how much Ether a miner has staked. This is similar to earning interest in your bank account with one key difference – the miner still has to validate transactions to earn a reward, whereas a bank customer has to do nothing to earn interest. Again, staking will dramatically alter Ethereum and reduce its energy consumption on a geometric scale.

Given these radical changes, it is hardly surprising that Ethereum and its smart contracts are slated to become a major force in Decentralized Financing (DeFi). In fact, the network received a solid boost recently when the European Investment Bank (EIB) used the Ethereum blockchain to issue zero-coupon digital notes with a maturity of two years and a par value of 100 million Euros. All of this, of course, bodes well for the bullish momentum in Ether.

How high can Ether go in the near-term?

After detailing the fundamental bullish aspects related to Ethereum 2.0, let’s examine how high Ether can feasibly go in the near term. To do this, we’ll be employing technical analysis. The cross between Ether and Bitcoin is a handy tool to examine the relative strength of the two largest cryptocurrencies in the world and depicts how many Bitcoins can be purchased from 1 Ether. After peaking in 2017 as Bitcoin’s price crashed, the ETH/BTC bottomed in early 2020. In 2021 however, Ether has broken out spectacularly, recording almost 4 times as much gain as Bitcoin’s in recent weeks. The chart below illustrates this dynamic.

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We now believe that Ether will top the previous ETH/BTC high of 0.156520. Provided that Bitcoin’s price remains in the current consolidation phase, this corresponds to the Ether hitting over $9,000. Given the introduction of the EIP 1559 in July, we expect Ether to hit this milestone in the next few months, paving the way for Ethereum to gain a lot more main street credibility.

Nonetheless, there are risks involved. We have marked two distinct supply zones (indicated by red lines) in the chart above. These zones act as resistance and can thwart Ether’s upward momentum. However, given Ethereum’s structural changes and its growing role in DeFi, a major reversal in momentum in Ether is unlikely to materialize at this stage.