In the crypto market, Bitcoin (BTC 0.09%) and Ethereum (ETH 2.74%) stand head and shoulders above everyone else. Together, they account for a staggering 70% of the total value of the crypto market.
So it's only natural that many investors boil down their crypto investment decision-making process to just a single question: Should I buy Bitcoin or should I buy Ethereum?
Which cryptocurrency has higher upside potential?
When it comes to upside potential, it's impossible to ignore Bitcoin. Even though it's trading for a vertigo-inducing price of $117,000 right now, most investors think that there's more to come. The growing consensus is that Bitcoin could hit a price of $1 million by the year 2030. That would represent a nearly 10-fold return from today's level!
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But don't sleep on Ethereum. Thanks to a rip-roaring summer rally, investors are suddenly ecstatic about the future upside potential of Ethereum. New stablecoin legislation, for example, appears to dramatically expand the utility of Ethereum, which already ranks as the top blockchain for stablecoin activity.
Moreover, growth in decentralized finance (DeFi) promises to deliver even more upside for the Ethereum blockchain ecosystem. More and more of the traditional financial system finally seems to be migrating over to blockchain technology, and that's a huge plus for Ethereum, which is the clear leader in DeFi right now.
The recent emergence of digital asset treasury companies that invest only in a specific cryptocurrency has also lit a fire under the price of Ethereum. This summer saw the launch of two high-profile Ethereum treasury companies that are accumulating ETH at a prodigious rate. That's going to create a consistent, long-term source of demand for Ethereum.
As a result, investors are rapidly raising their price forecasts for Ethereum. For example, Standard Chartered now thinks that Ethereum could hit a price of $7,500 by the end of this year, and a price of $25,000 by the end of 2028. Based on Ethereum's current price of about $4,500, that's a more than fivefold increase in just 36 months!
Which cryptocurrency provides a better hedge?
Arguably, it's a toss-up over which cryptocurrency has higher upside potential. But there's no disagreement whatsoever about which cryptocurrency provides a better hedge against macroeconomic risks such as inflation.
For good reason, Bitcoin is often referred to as digital gold. During times of financial distress, investors increasingly view Bitcoin as a safe asset, just like gold.
In September 2024, BlackRock (BLK +0.32%) analyzed Bitcoin's resilience to political, economic, and geopolitical shocks. The findings were eye-opening. During the past five years, Bitcoin has lived up to its billing as a safe asset. Yes, there have been times when Bitcoin has taken a beating after shocks first appear in the global financial system. But over the long term, Bitcoin eventually outperforms even gold.
For example, take the COVID-19 outbreak. Investors were understandably spooked about the impact of a global pandemic on economic growth, and Bitcoin promptly lost 23% of its value in the first 10 days. But, over a longer 60-day period, Bitcoin actually delivered returns of 24%. By way of comparison, gold only delivered returns of 2% during that time period.
CRYPTO: BTC
Key Data Points
The same phenomenon occurred with global tariffs this year. As soon as the new global tariff regime was announced on "Liberation Day," Bitcoin began to tank. But, within a month, Bitcoin started to recover. For the year, Bitcoin is now back in the green, and appears to be more tariff-resistant than many investors first thought.
And the better buy is...
Based on the above, Bitcoin is a better buy than Ethereum right now. Yes, Ethereum is outperforming Bitcoin in 2025. Ethereum is up 37%, while Bitcoin is up only 24%. But the long-term upside potential of Bitcoin is much higher.
Moreover, if you take a much more nuanced look at these two cryptocurrencies, and consider how they hold up under adverse market conditions, it's easy to see why Bitcoin is the preferable investment. It simply holds up so well under extremely challenging market conditions.
Just keep in mind -- just because Bitcoin has more upside potential doesn't mean that its price is only going to go up. Bitcoin remains a highly volatile and highly speculative asset, prone to periods of boom and bust. But if there's one cryptocurrency that I trust to hold up well under the very worst market conditions, it's Bitcoin.
