Choosing Between Ethereum and Bitcoin Amid Heightened Macroeconomic Risks

Source: Trading View

With assets under management of $23 Billion, GBTC tracks the Bitcoin (BTC) market price and charges fees of 2%. As for ETHE, it covers Ethereum (ETH), exhibits $7.5 billion of assets and carries 2.5% of fees. Both are investment vehicles which have attained the status of an SEC reporting company, with one of their advantages being ability to provide investors with exposure to BTC or ETH in the form of securities while avoiding the challenges of buying, storing, and safekeeping cryptocurrencies directly.

Coming back to the difference in price actions, this needs to be understood in the context of their individual uses, but, first, I bring some clarifications as to the concept.

Analyzing the cryptocurrency concept

Although the concept of the cryptocurrency shines with its allure, it remains obscure for many people until they hear about its aptitude at providing sky-high gains, and, conversely, also suffering from vertiginous drops. For this matter, there is also a lot of publicity around crypto being a Ponzi scheme, which is far from the truth.

Had this been true, reputable institutions would not have invested their money in digital coins. Moreover, in contrast with Ponzi schemes that require a constant flow of new money to survive, Bitcoin and Ether have not only survived several crashes but there are other new coins that are minted every single day.

Pursuing further, those who have put their money into Bitcoin in mid-2021 and before are still up, despite all the latest volatility. Still, people primarily invest in cryptocurrency due to its high-growth feature and thus its ability to multiply the value of their financial assets in terms of dollars rapidly. This said, Bitcoin still has to strike the right balance between a means of payment and a financial asset. This virtual currency is above all a potentially profitable investment.

Gauging the marketplace, Bitcoin remains very popular with retail investors who, in addition to the ETF or trust formulae, can buy it from dedicated cryptocurrency platforms or mainstream brokers, just like the purchase of shares on the stock exchange. Looking further, FinTechs like PayPal (NASDAQ:PYPL) also offer services like crypto wallets.

Scanning the corporate space, Bitcoin has been adopted by some financial institutions for boosting up their balance sheets. Aware that the risk factor is inseparable from Bitcoin as evidenced by the current volatility, these institutions including Tesla (NASDAQ:TSLA) have not sold their crypto assets. Others like MicroStrategy (NASDAQ:MSTR) have even bought the dip. This shows a high level of trust.

Now, the crypto market is a large one, and, as shown in Coinmarketcap, there are hundreds of coins, with those boasting the ten largest market cap listed below.