Why should I compare BTC/USD, ETH/BTC and BTC/ETH?
Michael The cryptocurrency market originated in 2009, with a small project called Bitcoin, which kick-started an entirely new financial concept. Since then, many new players have followed Bitcoin's lead and created their own digital currency. A few of the more well-known 'followers' are Lite coin, Ripple, and Ether.
The growing number of cryptocurrencies might actually become a little bit confusing for traders, which is why today's article will compare Bitcoin/US Dollar with Ethereum/US Dollar CFDs and ask the golden question: which one is better for trading purposes?
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Long-Term Price Potential
Bitcoin's (BTC) bullish price movement throughout 2018 makes it difficult to beat in terms of volatility. Bitcoin's rise against the US Dollar (BTC/USD) was almost without pause:
Bitcoin's 2018 low and starting point was around $3104
Bitcoin's 2018 high was above $17,168
You might be surprised to learn, however, that Ether has had a similar journey with its price movement versus the USD. ETH/USD started at around $781 on 1 January 2018 and rose to a whopping high of nearly $1,374 at one stage.
Who will be the winner in 2020? That's very difficult to tell, but Bitcoin's leadership role (see factor 2 below) could make a continuation of Bitcoin's bull run, with levels of $25,000, $50,000, or even $100,000 no longer a fantasy. The highest ever Bitcoin price is probably not yet written in stone.
From this perspective, the Bitcoin chart seems to have the upper hand, as it's considered to be the market favorite – especially when considering its constant bullish price action and its strong uptrends. You can clearly see the difference when you compare it to Ether, which had its bull sprints here and there, but not as consistently as Bitcoin.
All in all, both instruments have moved up a lot, so be aware that there is always a risk of market prices falling due to unexpected news. Also, the risk of an implosion can never be ruled out either when considering these asset classes. Below you can see the Bitcoin chart plotted against the US Dollar (BTC/USD):
Leadership Role
Bitcoin remains the most well-known cryptocurrency and there seems to be no threat of it losing that position. Therefore, the chance that Bitcoin will be able to preserve this status in 2018 as well is fairly decent.
The benefit of the leadership role for Bitcoin is that it could attract more investors. Cryptocurrencies in general, but specifically Bitcoin, are perhaps becoming more alluring for bigger investors, perhaps institutional investors as well. Bitcoin is well-positioned to receive much of their attention, if 2017 is anything to go by, Ether may receive a smaller part of the investments – but that remains to be seen.