Despite being the two largest cryptocurrencies in the world, Bitcoin (BTC +0.29%) and Ethereum (ETH +0.33%) have been on very different paths this year. Bitcoin is up more than 26% (as of July 17), while Ethereum is up less than 2%.
Bitcoin is considered a bellwether for the industry, but this year has really diverged. This leaves investors with a difficult proposition when picking between the two: buy the asset that just went on a strong run and hit all-time highs, or the one that has underperformed and could close the gap as a value play? Which cryptocurrency is more likely to be a millionaire maker, Bitcoin or Ethereum?
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Bitcoin: Digital gold and a flight to safety?
Bitcoin has soared since President Donald Trump won the election back in November. Trump positioned himself as a crypto advocate during his campaign, and he's held that position since taking office, with several Trump-backed organizations delving into the crypto world with their own crypto businesses.
Trump has surrounded himself with crypto advisors and installed pro-crypto officials in his cabinet, most notably at the U.S. Securities Exchange Commission (SEC). The SEC, which was a lot tougher on crypto during former President Joe Biden's administration, has since dropped or settled many of its landmark cases against major crypto firms, while removing regulations that impeded growth.
This has opened the door for the mainstream financial world to get more involved in crypto, whether it's offering custody services, more cryptocurrencies for sale on popular brokerages, or more willingness for institutions to buy and trade crypto.
CRYPTO: BTC
Key Data Points
Bitcoin, as the most well-known cryptocurrency, is an obvious place to start and therefore will likely benefit from these prices. Trump also announced the creation of a U.S. Strategic Bitcoin Reserve that will hold Bitcoin already in custody by the U.S. government and look for budget-neutral ways to purchase more Bitcoin.
Bitcoin also seems to be benefiting as more investors view it as a form of digital gold and therefore a hedge against inflation, with its finite supply of a maximum of 21 million coins, of which 19.9 million have already been mined. Regular gold has ripped in recent years, as investors grow increasingly concerned about the country's finances. The U.S. government now holds more $36.5 trillion in debt and has accumulated a $1.34 trillion deficit thus far in fiscal year 2025 after running a $1.83 trillion deficit in fiscal 2024. Geopolitical uncertainty has also made gold and potentially Bitcoin more attractive.
Ethereum: Are the advantages real?
Ethereum does not offer the same digital gold proposition as Bitcoin, but investors have largely viewed it favorably. For one, the network became the go-to place for developers to build smart contracts -- agreements that self-executive when certain terms are met. Many developers have also built their own tokens like Shiba Inu on Ethereum's network.
Several years ago, many began to criticize the high energy usage of cryptocurrencies due to the proof-of-work mining consensus mechanism needed to validate and mint new blocks. Ethereum then executed a multiyear project to convert to a proof-of-stake system, in which Ethereum holders stake their tokens to have a chance to validate and mint new blocks. Through this process, investors could earn yield on their tokens being staked, leading some like Cathie Wood to suggest that Ethereum has "attributes" similar to that of U.S. Treasury bills.
CRYPTO: ETH
Key Data Points
However, Ethereum has long struggled with congestion issues on its network, and competitors like Solana seem to pose a rising challenge. Furthermore, Ethereum seems to have lagged this year due to some of the same challenges that tech stocks have encountered like high interest rates and geopolitical uncertainty.
On the plus side, several companies have begun deploying crypto treasury strategies for Ethereum similar to Michael Saylor's Strategy. Many like top investment strategist Tom Lee also see immense potential for the network due to the rise of stablecoins, which have become a popular topic of discussion since stablecoin issuer Circle went public earlier this year and saw its stock soar. The two largest stablecoins, Tether and USDC, are both hosted on Ethereum's network.
Which is more likely to make you a millionaire?
In my opinion, Bitcoin and Ethereum are really the only two cryptocurrencies that investors can safely buy and hold in their portfolios. Both are likely to remain somewhat volatile, and both offer strong use cases.
But if I had to pick one, I am still going to choose Bitcoin. Whether it turns out to be true or not, a sizable portion of investors believe Bitcoin is a form of digital gold and the token's resilience through market turbulence, as well as a decrease in volatility, largely supports this narrative. This makes Bitcoin unique in that it can offer a form of diversification.
Furthermore, BlackRock, the largest asset manager in the world, has said that it's OK to allocate as much as 2% of a multi-asset portfolio to Bitcoin, which could make it a more common holding in the typical portfolio. Again, I think it's perfectly fine to own Ethereum, but Bitcoin really seems like it has achieved a level of acceptance that few, if any, cryptocurrencies will be able to replicate.
