Why Ethereum Is the Better Long-term Play

Bitcoin has for a long time been the de facto cryptocurrency of choice for investors and traders. It is often the benchmark with which the performance of other cryptocurrencies is measured. For years, Ethereum has been seen as second-best compared to crypto, but there are some emerging and persuasive reasons why Ethereum might be the better cryptocurrency.

The Merge

A compelling reason in Ethereum’s favor is the merge. Ethereum moved from a proof-of-work consensus mechanism to a proof-of-stake one. What this means, in simple terms, is that Ethereum is running on superior technology that makes everything on the network cheaper, better, and faster.

Bitcoin, on the other hand, still has the same challenges which stem from being a low-throughput, energy-intensive, and proof-of-mining technology.

Real-world Utility

Ethereum has a lot more real-world utility than Bitcoin. To understand why, we have to first understand what Ethereum actually is. Ethereum is a technological platform that allows other technologies to be built on top of its blockchain. These technologies include other coins and tokens, non-fungible tokens, decentralized apps, and smart contracts.

The Ethereum most people know is the token used on the Ethereum blockchain. You can buy and sell Ethereum like you could other cryptocurrencies. You can check the Ethereum live price index before doing so to know how it is doing at the moment.

Being such an open technological platform means developers can, and have been, taking advantage of it to build products that have real-world utility. For example, its smart contracts are heavily used in decentralized exchanges and peer-to-peer crypto swaps.

All the apps and other protocols that run on the Ethereum blockchain mean that it has an ecosystem that Bitcoin does not. While one can wait for the demand for Bitcoin to keep driving its price, the utility of the Ethereum ecosystem is likely to drive its value and price in the coming years.

Changing Investment Narratives and Sentiment

Investor narratives and sentiments surrounding Bitcoin are starting to collapse. It all starts with how Bitcoin was propped up.  The basic argument for investing in and holding Bitcoin was that it did not have a direct correlation with other investments like stocks. This meant that even in cases where other investments tanked, Bitcoin would not.  Because of this, it was regarded as the “digital gold” that would keep holding no matter what happened in the surrounding market.

The Meltdown

The more people saw bitcoin as “digital gold” the more people bought it. However, the last market meltdown has shown us Bitcoin is not as resilient to market forces as many people believed it to be. Granted, its value is still holding, but it fell much faster and further than other cryptocurrencies.

The Ethereum shift to its proof-of-stake mechanism has made it a deflationary asset, which has made it an even more attractive hedge against inflation. Also, an increasing amount of Ethereum will be unavailable because of how staking works and this will drive the price of Ethereum up as demand falls.

Conclusion

An increasing number of companies and developers are building on Ethereum and leaving Bitcoin behind. Its scalability and flexibility is making it the better option for these companies and developers, making it a better long-term play than Bitcoin.