Bitcoin VS Ethereum which cryptocurrency you should invest in? It’s a risk-off environment right now, so I suspect that prices in 2022 will go lower. Of course, I’m not a financial adviser, nor can I see the future you do your own research and make your own decisions about whether or not to buy. But I wouldn’t be surprised if we saw a bounce sometime soon. Let’s start with the question:
Why is Bitcoin in a bear market?
The answer has to do with risk tolerance as well as Bitcoin dominance. A lot of these altcoins are riskier and more speculative than Bitcoin. Well, Bitcoin is a complete project a store of value, and means of payment. Altcoins are based more on hope for the future, but Bitcoin works great now. Cryptos also work well and have the most users and liquidity, with the most history behind them. In risk-off environments, it’s safer to invest in Bitcoin or other cryptos that have already been around longer. We can prove this every cycle: when it’s a bull market for altcoins, Bitcoin dominance rises; when it’s a bear market for bitcoin, altcoin dominance falls. If you see the chart of bitcoin dominance over the years. From 2016 to the present day, you will see that bitcoin’s dominance has fluctuated from 95% down to 35%. This indicates that during bull markets, altcoins tend to perform better than during bear markets.
Bitcoin VS Ethereum: From 2018 to 2020, bitcoin’s dominance grew from 35% up to 70%. Then in early 2021 and again at the end of 2021, bitcoin’s dominance decreased back down to 39%. And this is how the bull market peaked. Now, even though altcoins are currently down by as much as 50-70%, bitcoin’s dominance has just started decreasing. And usually over time, trends tend to be correct (not always).
Will Ethereum get back up to what it hit the last cycle?
Bitcoin VS Ethereum: I don’t think so. We’re seeing diminishing returns for ether as well. One reason is that we have more altcoins in the cryptocurrency market than years ago but also better quality altcoins that are sticking around longer. So while bitcoin is king, the dominance of ether will continue to increase. I don’t think we’ll get all the way back to the peaks we saw the last cycle, though. Anyway, towards the end of this article, I want to zoom in on where we are now. But generally speaking: This is why people prefer bitcoin in bear markets.
Bitcoin VS Ethereum: Ethereum is a big contender in terms of dominance, but it still doesn’t compare to Bitcoin. But let’s get specific, because something that’s new and has never been a part of past cycles is the amount of DApps and use cases on the Ethereum network, not to mention the Metropolis upgrade that happened this year.
What Etherium applications have the highest demand?
To find out we followed where users spent their gas tokens, were they on Defii applications (decentralized exchange finance applications) ERC 20s (Etherium-based tokens), etc. There are the two biggest consumers of Etherium one is Defi and the other is NF T. This was different than last time because define NF T’s weren’t really even in the conversation. It was all ERC 20 tokens, this darker green. It was the ICO/ERC 20 Boom, then we had Defi summer of 2020. Bitcoin really rallied here in 2020. And then in 2021, NFTs clearly seeped into mainstream use at 30%, and they are clearly dominant today.
I think in 2022 Bitcoin will prove to be a better investment than altcoins. I don’t know if we’ll see Bitcoin dominance return to its all-time high of over 70%, but I could easily see us get back to the support of around 50 to 55%, which we’ve seen so many times before. Now, that’s not to say that altcoins are dead rather, the good projects are consolidating and will come up much stronger in the next bull market, I’d say, and even if we do see a bounce in some of these coins start going back up in USD value, I still think because of Bitcoin dominance 2022 at least for these next few months is the time for Bitcoin. What do you think about Bitcoin vs Ethereum which coin is the best and safe pick? Feel free to share your thoughts down below.
The most well-known altcoin is Ethereum, which many investors and enthusiasts consider to be much more than just another cryptocurrency. It’s a good investment.
Yes, Ethereum can easily hit this target because its the second most famous and used cryptocurrency in the world.
Large institutions are choosing Ethereum as their preferred blockchain due to its scalability and flexibility. If Bitcoin is “digital gold,” Ethereum is “digital oil.