Ethereum vs. Bitcoin: Which Crypto Actually Makes You More Money?

Is Ethereum more profitable than Bitcoin?

Bitcoin and Ethereum are the two most powerful cryptocurrencies on the market. Their resilience, openness to innovation, and growing activity contributed to a flourishing environment. Thus, the global user base of digital coins boomed between 2018and 2020, gaining momentum again in 2022, according to Statista.

Despite their influences on the market, Bitcoin and Ethereum experienced challenges, including massive gas fees, network congestion, and sustainability concerns. Bitcoin developers are coming up with solutions for the scalability problem with layer-2 systems like the Lighting Network (LM) or the Lighting Charge, while Ethereum’s creator, Vitalik Buterin, designed the development road for a thorough idea of the blockchain’s pain points.

While Bitcoin’s creator is still a mystery, he’s supposed to own a considerable number of Bitcoins. On the other hand, Buterin explained his investments, revealing that more than 90% of his portfolio is Ethereum, while the rest includes Bitcoin, Dogecoin, and other cryptocurrencies. While learning how to buy Ethereum isn’t difficult, he recommended investors focus on the tech beyond a coin instead of the price, as well as buy and hold for as much as possible.

Both cryptocurrencies have different histories, but when we weigh the differences between them, it may seem difficult to determine which is more profitable, so let’s explore this further.

What makes Bitcoin profitable?  

From the first transaction in 2009, Bitcoin’s value increased considerably, placing it at the top of the list in terms of market capitalization. Therefore, the opportunities for Bitcoin to be profitable expanded, with options more or less difficult for investors, such as the following:

• Holding Bitcoin is easy, as it only requires buying and holding the cryptocurrency for longer. However, many are tempted to buy or sell due to the pressure volatility;
• Lending Bitcoin is considered mildly tricky due to the platform’s specific stipulations. Still, earning interest from Bitcoin by lending it is possible;
• Mining Bitcoin is one of the most lucrative methods of making money, but it requires entering mining pools since independent mining is close to impossible due to the high costs of hardware;

Other options for leveraging profit from Bitcoin include day trading, accepting payments or tips in Bitcoin, and using a credit card with Bitcoin rewards. Considering Bitcoin’s future, these investment opportunities might become even more financially rewarding, especially since the US President announced the creation of a Strategic Bitcoin Reserve.

What makes Ethereum lucrative?

Ethereum’s creator took inspiration from Bitcoin’s whitepaper when developing it but switched its trajectory from a store of value to a technological breakthrough. Smart contracts, decentralized autonomous organizations (DAOs), and non-fungible tokens (NFTs) became representative of the blockchain’s capabilities. Profit opportunities include:

• Staking Ethereum by activating the validator software, which means storing data and processing transactions to add new blocks to the blockchain;
• Day trading Ethereum to take advantage of short-term price fluctuations and high liquidity, but this is more suitable for short-term gains;
• Yield farming implies users provide liquidity to decentralized exchanges (DEXs) and facilitate trading to receive rewards from trading fees;

Besides these options, the Ethereum blockchains offer developers all the tools necessary to create and monetize decentralized apps (dApps), NFTs, and decentralized games. The network is a massive contributor to the metaverse and Web3 technologies, making it a pivotal solution for the future.

What are some notable differences between Bitcoin and Ethereum?

The main distinction between the crypto projects is the use case. While Bitcoin aims to become a digital asset in the future, Ethereum focuses on hosting cryptocurrencies, dApps, and innovative technologies. This might make it seem like Ethereum is much more profitable as it offers a vast array of activities for investors, stakers, and developers. However, beating Bitcoin’s value is challenging as it’s slowly becoming legal tender across the world, El Salvador being the primary example of introducing cryptocurrency as an established currency.

 Another difference is the consensus mechanism. Bitcoin still uses proof-of-work (PoW), which makes mining complex and expensive but safeguards decentralization. On the other hand, Ethereum started with PoW but soon switched to proof-of-stake (PoS),which is more sustainable and user-friendly but seems to lead to centralization. This has happened since several staking pools gained so much ETH that they’re dominating the network.

Bitcoin will always be the first choice

Bitcoin’s resilience has made it the first option for investors and traders. That’s because it has withstood massive price spikes through the years but still maintained value. Its impressive recoveries following brutal market moments established Bitcoin as a safe investment.

At the same time, the cryptocurrency’s scarcity contributed to its long-term value. The 21 million maximum supply makes Bitcoin anti-inflationary, and by reducing mining rewards every four years, the asset becomes increasingly valuable as it reaches the coin limit. This event is called “halving,” and it reduces the block reward by 50% to increase scarcity and raise prices. The last halving was in 2024, and it decreased the reward to 3.125 BTC.

Ethereum will always actively seek ways to improvement

Ethereum will continue providing value to the market due to its constant development journey. Vitalik’s roadmap might extend to the following five to ten years, in which the ecosystem will receive improvements such as cheaper transactions, enhanced security, and better user experience.

Ethereum standards are also necessary because they create smart contracts on the blockchain that contain improvements. For example, ERC20 is a token standard, but there are also NFT standards like ERC721 or ERC1155. Many cryptocurrencies are, in fact,ERC20-backed, such as Tether USD, Shiba Inu and DAI. ERC721, on the other hand, backed the CryptoKitties collection but was also the technology that allowed the creation of decentralized games like Axie Infinity and digital art like Beeple’s “Everydays: The First 5000 Day”.

Which crypto project is more valuable?

Bitcoin and Ethereum are leading the market by providing a store of value for the future and a blockchain suitable for innovative discoveries. Therefore, comparing them would be counteractive because they ensure benefits and opportunities for different types of users, whether investors or developers. Regardless, users can access numerous methods for profit from both cryptocurrencies.

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