Better Crypto Buy: Bitcoin vs. Ethereum

Together, Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) account for a whopping 70% of the total market cap of the crypto market. So if you're thinking about investing in crypto right now, it's probably coming down to a choice between these two crypto heavyweights.

So which one is the better investment right now: Bitcoin or Ethereum? To answer that question, it's important to consider three critical factors.

Image source: Getty Images.

Historical track records

Let's start with the historical track records of Bitcoin and Ethereum. Although Bitcoin has consistently been one of the top-performing assets in the world during the past decade, Ethereum has been no slouch.

Bitcoin / U.S. dollar chart by TradingView

Just take a look at this chart for the period 2015 to 2025. Bitcoin is up an astounding 31,267% while Ethereum is up an equally impressive 26,750%. For much of that time period, the two cryptocurrencies appeared to move in lockstep, without any clear winner.

Bitcoin / U.S. dollar chart by TradingView

But let's just focus on the period from 2020 to 2025. During this five-year stretch of time, Ethereum actually has the edge. It's up 637%, compared to 533% for Bitcoin. The two big years for Ethereum were 2020 and 2021, when it benefited from a huge surge in decentralized finance (DeFi) activity.

Based on historical track records alone, it's hard to find a clear winner. Bitcoin has outperformed Ethereum over a longer period of time, but Ethereum has the slight edge if more recent performance is the focus.

Future growth prospects

So what if we look instead at future growth prospects? After all, if cryptocurrencies should be valued like stocks, investors should be concerned about how fast each of them are projected to grow during the next decade.

Here, Bitcoin would appear to have a slight edge. The broad narrative here is that Bitcoin will reach $1 million by the year 2030. That's roughly a 10-fold gain within a very short period of time.

By way of comparison, the future growth prospects for Ethereum are not as robust. Earlier this year, Standard Chartered predicted that Ethereum would hit a price of $25,000 by the end of 2028. Based on a current price of $3,500, that's roughly an eightfold return on investment.

Just keep in mind that some analysts are now starting to ratchet down their price targets for both digital assets. Cathie Wood of Ark Invest, for example, recently reduced her Bitcoin price target from $1.5 million to $1.2 million.

Downside protection

Given the recent volatility in the crypto market, it's worth considering which cryptocurrency offers greater potential downside protection. While Ethereum is arguably more diversified than Bitcoin in terms of its overall blockchain ecosystem, it does not have nearly the same appeal as Bitcoin as a potential safe asset.

Right now, there's plenty of evidence for Bitcoin's staying power through prolonged downturns and volatile market swings. Yes, Bitcoin sometimes takes a hit from macroeconomic uncertainty and geopolitical risk, but it always bounces back.

In fact, a research report from BlackRock (NYSE: BLK) found that Bitcoin tends to outperform gold as a store of value during turbulent market downturns. For that reason, some investors now refer to Bitcoin as "digital gold."

And the winner is...

For all of these reasons, then, Bitcoin is still the clear winner. It has greater future upside potential than Ethereum. It has a superior historical track record during the past decade. And it appears to offer more downside risk protection in case things go south.

If you are thinking about investing in crypto now, Bitcoin is arguably the best choice you can possibly make. There's no guarantee that it will continue to rise in price during the next 12 months, but there's no other place in the crypto market I'd rather put my money right now.

Dominic Basulto has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool recommends BlackRock. The Motley Fool has a disclosure policy.