Better Crypto Buy: Bitcoin vs. Ethereum

The two most popular cryptocurrencies -- Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) -- are trading well below their all-time highs from just a few months ago. Bitcoin is down about 30% from its all-time high of $126,198 in October, while Ethereum is down roughly 40% from its all-time high of $4,954 in August.

Based on these deeply discounted prices, both Bitcoin and Ethereum look like tremendous bargains right now. But which one is the better buy?

Higher upside potential

First and most importantly, Bitcoin has more upside potential than Ethereum. According to a recent roundup of price predictions from CNBC, crypto industry insiders still think that there's a realistic chance for Bitcoin to hit $200,000 this year. After all, in seven of the past 14 years, Bitcoin has delivered triple-digit percentage returns for investors. So why not again in 2026?

Even analysts that are downgrading their future price targets for Bitcoin have a healthy regard for its powerful upside potential during the next few years. For example, Cathie Wood of Ark Invest recently downgraded her 2030 price target from $1.5 million to $1.2 million. That's a notable 20% reduction in price. But it still implies that Bitcoin is going to turn in a compound annual growth rate (CAGR) of more than 60% during the next five years.

Image source: Getty Images.

In contrast, it's much harder to find analysts who are as optimistic about Ethereum. Aside from the wild predictions sometimes made by executives at Ethereum treasury companies (i.e. companies that do nothing but buy and hold Ethereum), it's hard to find anyone willing to take a firm stance on Ethereum.

Data from prediction markets confirms this. Right now, investors think there's only a 26% chance of Ethereum climbing back to the $5,000 price level this year.

Superior track record

If history is any guide, Bitcoin will continue to outperform Ethereum. During the past 10 years, Bitcoin is up a staggering 24,000%. Ethereum is not far behind, at 21,000%. Although these two cryptocurrencies remain highly correlated, Bitcoin has managed to stay one step ahead of Ethereum, year after year.

Bitcoin / U.S. dollar chart by TradingView

The only major exceptions were 2020 and 2021, when Ethereum went absolutely ballistic as a result of the wild speculative mania in decentralized finance (DeFi). But even in down years, Bitcoin has provided slightly more protection than Ethereum.

Obviously, history is no guarantee of future performance. But I'm much more confident in Bitcoin's future price trajectory than Ethereum's. For many investors, the investment thesis for Bitcoin is clear: it is digital gold, a safe asset, a long-term store of value, and a stand-alone asset class. As a result, Bitcoin should remain a major focus of institutional investors for years to come.

In comparison, the narrative about Ethereum has never been as clear in the minds of investors. Is it "digital silver," as some Wall Street analysts propose? Is it a high-beta tech stock? Or is something entirely different?

Moreover, Ethereum now has many more competitors nipping at its heels than Bitcoin. A handful of rival Layer 1 blockchain networks now rank among the top 20 cryptocurrencies in the world, including both Solana (CRYPTO: SOL) and Cardano (CRYPTO: ADA). Bitcoin, for its part, has no obvious crypto rival.

Buy the dip?

At the end of the day, it's hard to go wrong with either Bitcoin or Ethereum, especially when they are trading at such bargain prices. Time and time again, the correct strategy for crypto investors has been to buy the dip.

That's why I'm planning to load up on Bitcoin this year. The discounted price is just too good to pass up, and the upside potential is just too enticing to ignore. Five years from now, an $89,000 investment in Bitcoin could be worth $1 million or more. As a result, I'm focused less on Bitcoin's short-term outlook than its long-run potential.

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