The recent sharp declines in the crypto market have once again raised the question, is it better to invest in Bitcoin (BIT) or Etherium (ETH) in the long run? These are the two largest currencies in the crypto market, with the ratio between etherium and bitcoin being at its highest level for three and a half years, meaning that etherium is stronger than bitcoin. For example, in the last week Bitcoin lost 11.6%, while Etherium lost 1.6% in the week that was characterized by declines, meaning it maintained relative stability.
In choosing between the two, one should take into account that these are two currencies whose purposes are completely different. Bitcoin is the first cryptocurrency, and its main purpose is to be a decentralized, anti-inflationary tool for transferring value. Etherium on the other hand is a currency that represents a more complex digital platform, on which smart contracts can be created for the development of advanced crypto products. For example, the Bank of Israel, which is currently conducting an experiment to issue a digital shekel, has chosen to do so using etherium technology.
There are several reasons for the rise of etherium in relation to Bitcoin. The first, in early August, was upgraded to the network, dubbed the “London Protocol”, with the aim of streamlining the blockchain in terms of the structure of commissions and the speed of transactions. The London Protocol is a step in the right direction for the launch of the Ethereum 2.0 system. In this process the network goes from an energy-wasting POW job proofing process to a POS process.
The second reason is that the use of etherium is rising in areas that are booming like DEFI (Decentralized Finance), the decentralized economy that includes stock exchanges and trading in smart contracts-based financial products. In addition, the etherium serves as a broad infrastructure for the NFT, the world of digital art, which is at the peak of popularity.