Bitcoin Vs Ethereum
Bitcoin vs Ethereum … the two largest cryptocurrencies both by price and market capitalisation. Ethereum is one of the only cryptos that can rival Bitcoin’s dominance of the market, even though it is six years younger. If you are comparing Bitcoin vs Ethereum and you want to know what the difference between the two is, the history of each, their transaction and gas fees, environmental impacts, which is a better investment, which one to buy and more, read this 2021 comparison. We have also provided a list of our top brokers and exchanges that offer trading in Bitcoin and Ethereum.
Top Litecoin & Tether Trading Brokers
#1 - AvaTrade
Why We Chose AvaTrade
Regulated in five continents, AvaTrade offers a secure way to access crypto markets. There's a great range of digital currencies including Bitcoin, Ethereum and Ripple, plus a crypto index. You can access competitive crypto spreads in the broker's wide choice of platforms as well as 1:2 leverage.
"AvaTrade offers the full package for short-term traders. There is powerful charting software, reliable execution, transparent fees, and fast account opening with a low minimum deposit."
- DayTrading Review Team
- Coins: BCH, BTC, BTG, ETH, LTC, XRP, EOS, DASH
- Crypto Mining: No
- Auto Market Maker: No
- Crypto Spread: BTC <1%, ETH 2%
- Crypto Lending: No
- Crypto Staking: No
- Platforms: WebTrader, AvaTradeGO, AvaOptions, MT4, MT5, AlgoTrader, TradingCentral, DupliTrade
- Regulator: ASIC, CySEC, FSCA, ISA, CBol, FSA, FSRA, BVI, ADGM
About AvaTrade
AvaTrade is a leading forex and CFD broker, established in 2006 and regulated across 9 jurisdictions. Over 400,000 users have signed up with the broker which processes over 2 million trades each month. The firm offers multiple trading platforms, including MT4, MT5, and a proprietary WebTrader. 1250+ financial instruments are available for day trading, alongside a comprehensive education center and multilingual customer support.
Pros
- Day traders can access stable spreads and zero commissions with no hidden fees
- There's a great range of fee-free deposit methods, including bank wire, credit cards and popular e-wallets like Skrill
- The broker offers reliable 24/5 multilingual customer support with fast response times during testing
Cons
- Traders from the US are not accepted
- There’s an above-average $50 inactivity fee after three months, though this won't impact active day traders
- It’s a shame that there are no rebate schemes for serious traders looking for additional perks - CMC Markets would be a better choice here
#2 - OANDA US
Why We Chose OANDA US
You can speculate on the world’s biggest cryptos by market cap. Commissions are lower than many peers starting at 0.25%. Through the broker’s partnership with Paxos, clients can spot trade cryptocurrencies on the itBit exchange through the OANDA native platform.
"OANDA remains an excellent broker for US day traders seeking a user-friendly platform with premium analysis tools and a straightforward joining process. OANDA is also heavily regulated with a very high trust score."
- DayTrading Review Team
- Coins: BTC, ETH, LTC, BCH, PAXG, LINK, UNI, AAVE
- Crypto Mining: No
- Auto Market Maker: No
- Crypto Spread: $100
- Crypto Lending: No
- Crypto Staking: No
- Platforms: OANDA Trade, MT4, TradingView, AutoChartist
- Minimum Deposit: $0
- Regulator: NFA, CFTC
About OANDA US
OANDA is a popular brand offering exceptional execution, low deposit requirements and advanced charting and trading platform features. The top-rated brand has over 25 years of experience and is regulated by trusted agencies, including the NFA/CFTC. Around the clock support is available for short-term traders, alongside flexible contract sizes and automated trade executions.
Pros
- Seasoned day traders can access industry-leading tools, including an MT4 premium upgrade and advanced charting provided by MotiveWave
- There's a strong selection of 68 currency pairs for dedicated short-term forex traders
- The broker offers a transparent pricing structure with no hidden charges
Cons
- There's only a small range of payment methods available, with no e-wallets supported
- It's a shame that customer support is not available on weekends
- The range of day trading markets is limited to forex and cryptos only
#3 - Deriv.com
Why We Chose Deriv.com
Deriv.com continues to offer a strong selection of 30+ crypto pairs - this is more than double the range offered at our leading competitor, IQ Cent. 1:2 leverage is also available so you can magnify potential returns, and there are no commissions which is ideal for newer day traders.
"Deriv.com will suit day traders looking to make fast-paced trades using CFDs and multipliers with high leverage up to 1:1000. The broker is also the industry leader in synthetic indices, which simulate real market movements and are available around the clock. "
- DayTrading Review Team
- Coins: BTC, LTC, ETH, USDT, USDC
- Crypto Mining: No
- Auto Market Maker: No
- Crypto Spread: From 0.5
- Crypto Lending: No
- Crypto Staking: No
- Platforms: Deriv Trader, MT5
- Minimum Deposit: $5
- Regulator: MFSA, LFSA, VFSC, BFSC
About Deriv.com
Deriv.com is a low cost, multi-asset broker with over 2.5 million global clients. With just a $5 minimum deposit, the firm offers CFDs, multipliers and more recently accumulators, alongside proprietary synthetic products which can't be found elsewhere. Deriv provides both its own in-house charting software and the hugely popular MetaTrader 5.
Pros
- The free demo account is ideal for practicing short-term trading strategies and no registration is required
- Traders can use multipliers between 1 and 30, with take profit, stop loss and deal cancellation parameters
- Deriv continues to offer fast and reliable 24/7 support and the WhatsApp service is particularly convenient
Cons
- There's no loyalty program or rebate scheme for high volume traders
- The range of 100+ assets trails some competitors such as Quotex which offers 400+
- There are limited copy trading tools and analysis features compared to alternatives like IQ Cent
#4 - Pepperstone
Why We Chose Pepperstone
Pepperstone continues to prove itself as one of the most trusted crypto brokers. Although its selection of digital tokens is average, you can trade popular cryptos like Bitcoin and altcoins like Ripple with up to 1:10 leverage, while its crypto indices provide a holistic view of the digital currency markets not found on most day trading platforms.
"Pepperstone stands out as a top choice for day trading, offering razor-sharp spreads, ultra-fast execution, and advanced charting platforms for experienced traders. New traders are also welcomed with no minimum deposit, extensive educational resources, and exceptional 24/7 support."
- DayTrading Review Team
- Coins: BCH, BTC, ETH, LTC, DASH, ADA, LINK, DOGE, EOS, DOT, XRP, XLM, XTZ, UNI, BNB
- Crypto Mining: No
- Auto Market Maker: No
- Crypto Spread: BTC 30, ETH 0
- Crypto Lending: No
- Crypto Staking: No
- Platforms: MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade
- Minimum Deposit: $0
- Regulator: FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB
About Pepperstone
Established in Australia in 2010, Pepperstone is a top-rated forex and CFD broker with over 400,000 clients worldwide. It offers access to 1,300+ instruments on leading platforms MT4, MT5, cTrader and TradingView, maintaining low, transparent fees. Pepperstone is also regulated by trusted authorities like the FCA, ASIC, and CySEC, ensuring a secure environment for day traders at all levels.
Pros
- Award-winning customer support is available via telephone, email or live chat with response times of <5 minutes during testing.
- Now offering spread betting through TradingView, Pepperstone provides a seamless, tax-efficient trading experience with advanced analysis tools.
- Pepperstone emerges as a low-cost broker, especially for serious day traders with spreads from 0.0 in the Razor account and rebates of 25%+ through the Active Trader program.
Cons
- Pepperstone’s demo accounts are active for only 30 days, which may not be not long enough to familiarize yourself with the different platforms and test trading strategies.
- Pepperstone does not support cTrader Copy, a popular copy trading feature built into the excellent cTrader platform and available at alternatives like IC Markets.
- There’s no simplified proprietary trading platform, nor are there any social trading features, which could be a disadvantage if you are new to day trading.
#5 - XM
Why We Chose XM
XM offers a handful of cryptocurrencies against the USD via the South African entity only. These are tradable via CFDs with high leverage up to 1:500. You can explore major tokens like Bitcoin, Ethereum and Ripple with just a $30 deposit.
"XM is one of the best forex and CFD brokers we have tested. The flexible account types will suit a variety of short-term trading styles while the $5 minimum deposit and smooth sign-up process make it easy to start trading."
- DayTrading Review Team
- Coins: BTC, ETH, LTC, XRP, BCH
- Crypto Mining: No
- Auto Market Maker: No
- Crypto Spread: Variable
- Crypto Lending: No
- Crypto Staking: No
- Platforms: MT4, MT5
- Minimum Deposit: $5
- Regulator: ASIC, CySEC, DFSA, FSC, FSCA
About XM
XM is a globally recognized forex and CFD broker with 10+ million clients in 190+ countries. Since 2009, this trusted broker has been known for its low fees on 1000+ instruments. XM is regulated by multiple financial bodies, including the ASIC and CySEC.
Pros
- The broker offers premium research including market sentiment, fundamental insights and strategy builders
- XM is a hugely respected broker authorized by tier-one regulators
- 1000+ instruments are available, including recently added thematic indices, providing exposure to emerging industries
Cons
- PayPal deposits are not supported
- There is weak regulatory oversight through the global entity
- There's $5 inactivity fee after only 3 months, though this won't affect active traders
What Is Bitcoin?
Before we get into Bitcoin vs Ethereum, BTC vs ETH, let us first explore what Bitcoin is, though some may say it needs no introduction. It was the first decentralized, digital currency and was announced in 2008 by a person or group using the pseudonym Satoshi Nakamoto. Following its announcement, the first and second blocks were mined on and after January 3rd, 2009, signalling the beginning of Bitcoin mining and the blockchain as we know it today.
In the years following its inception, Bitcoin’s price grew slowly and steadily. However, in 2017 everything changed, the crypto world boomed causing prices of all cryptocurrencies, particularly Bitcoin, to skyrocket. By December 2017, Bitcoin hit a high of $19,783.06. The initial bubble burst after this but November 2020 saw a new high of $19,850.11 reached. As recently as September 2021, the price of one Bitcoin was $50,128. Today’s price, as well as live and previous price charts, can be found on websites like CoinMarketCap.
Considering the main uses of Bitcoin vs Ethereum, BTC is a list of transactions, stored on a blockchain network. Despite the images of coins with the coin logo on them, there is no physical form to the tokens, it is purely digital. The transactions on the blockchain are statements as simple as person A sent Bitcoin to person B. This information is stored in blocks, which are verified by miners, ensuring each transaction is genuine and that Bitcoins are not used twice.
There are hundreds of uses for Bitcoin, with the most popular being investing in the cryptoasset itself. The price fluctuates heavily within days or weeks, presenting opportunities for traders with a keen eye to make a profit. However, that is not the only use for Bitcoin. Many services online accept Bitcoin as a method of payment. Also, in June 2021, El Salvador officially became the first country in the world to accept Bitcoin, and any cryptocurrency for that matter, as a legal tender.
What Is Ethereum?
When comparing Bitcoin vs Ethereum, it can seem like the two are inherent rivals, but this is not necessarily the case. Ethereum was launched in 2015 by a group of developers who were blockchain enthusiasts, including Joe Lubin and Vitalik Buterin. Technically, Ethereum itself is not a cryptocurrency. Ethereum is the largest and most well-established, open-ended decentralized software platform. Using its smart contract technology, developers can build their own applications. As a result, a lot of the cryptocurrencies you see today are built and run using the Ethereum smart contract technology.
When many people refer to Ethereum, what they really mean is Ether (ETH). Ether is the native cryptocurrency, designed to be used on the Ethereum network. The two names can be used interchangeably, but Ether is the actual currency. Ether was launched for pre-sale in 2014 and has grown to become Bitcoin’s biggest competitor. By the end of 2015, Ethereum was the fourth-largest cryptocurrency by market cap, and, in March 2016, it had become the second-largest, behind Bitcoin.
Both Bitcoin vs Ethereum, like many cryptos, benefitted from the 2017 bubble, reaching a peak value of $1,396.42. In April 2020, Ethereum hit a new peak at $4,168.70 as the crypto world experienced another spike. Today’s price can also be found online with crypto exchanges and information sites like CoinMarketCap. Ethereum has many uses. Like Bitcoin, many people try to use the fluctuations to buy and sell coins and make a profit. Similarly, people all over the world are now able to use Ethereum to pay for a variety of goods and services.
Bitcoin Vs Ethereum Similarities
Bitcoin vs Ethereum compares two quite similar entities, they are both decentralized, digital currencies that can be traded on a range of platforms and through a range of systems (including spot or leverage trading). Both Bitcoin (BTC) and Ethereum (ETH) are traded on a long-term and short-term basis, in some cases being used as a store of value, and the similarities do not end there:
Fees
While not identical, fees for Bitcoin vs Ethereum are quite similar. On average, the fee per Bitcoin transaction is around USD 7, while for Ethereum it is around USD 5. In the grand scheme of things, these fees are very similar. They are both used for the same purpose, to pay network assistants that have verified blocks on the blockchain as part of the mining process. The Bitcoin fees are slightly higher as they have to pay more to their miners, largely due to the greater value of Bitcoin.
Storage & Transactions
Looking at Bitcoin vs Ethereum, the storage and transaction mechanisms are extremely similar. The two currencies are both bought and traded on almost every cryptocurrency exchange available. You would be hard pushed to find an exchange that did not offer both. The two coins can be traded on decentralised exchanges (DEXs), centralised exchanges (CEXs) and peer-to-peer (P2P) trading platforms where users trade directly with each other and exert more control over the price.
Storage is also the same for each cryptocurrency. A wallet is required to store any coins you purchase and own. This wallet can come in a variety of forms, including hot or cold wallets, as well as digital and hardware wallets.
Proof Of Work
Both Bitcoin vs Ethereum use the proof of work system. This is a method that requires a large amount of effort to be exerted to verify transactions on the blockchain. Network participants, or miners, solve mathematical puzzles using hash algorithms to find the correct answer and be the first to mine the block. This process verifies any transactions involving the coins, as well as generating new coins that are rewarded to the miners for their work.
Bitcoin Vs Ethereum Differences
Even with all their similarities, the Bitcoin vs Ethereum debate presents many more differences:
Market Capitalisation
Market cap is one area in the Bitcoin vs Ethereum comparison that varies massively. For years, Bitcoin has dominated the rankings of cryptocurrencies by market capitalisation. In September 2021, Bitcoin had a market cap of over $780 billion compared to Ethereum’s $336 billion, which is over double.
Ethereum may be the second-largest coin by market cap but there is still a way to go to get close to Bitcoin. However, market cap charts show that Ethereum is closing the gap, albeit slowly. In August 2020, Bitcoin had a market cap of over $215 billion, while Ethereum had a cap of $43 billion, smaller by a ratio of five. The difference is closing and, perhaps in the future, Ethereum could overtake Bitcoin come 2025 or 2030, forecasts show it could be possible. As well as market cap, Bitcoin also experiences close to double the trading volume of Ethereum.
Smart Contracts
One of the biggest differences between Bitcoin vs Ethereum is the overall aim of each network. Bitcoin was founded as an alternative to regular fiat currencies (national currencies like the US dollar) and as such was intended to be a store of value or a medium of exchange.
Ethereum, on the other hand, was designed as a platform to facilitate programmatic contracts and applications via its currency. For dummies, a so-called ‘smart contract’ is simply a program stored on a blockchain that runs when predetermined conditions are met. Ethereum is built on trying to elevate the online community and DeFi world. Right now, there are over 3,000 decentralized apps (dapps) running on the Ethereum blockchain, many of which are cryptocurrencies of their own. This marks a stark difference from Bitcoin’s mission.
Distribution
Bitcoin vs Ethereum’s distribution systems differ. Bitcoin has a limited supply of 21 million coins and, once that is reached, no more coins will be added. Ethereum, however, has no limit. Theoretically, more and more coins could be added until there were an infinite number. While this could seem like an advantage to Bitcoin as scarcity drives worth, Ethereum already has significantly more coins in circulation and still holds value.
Mining Profitability & Energy Usage
One key difference relates to Ethereum’s (ETH) energy and power usage vs Bitcoin’s (BTC). Both Bitcoin and Ethereum currently use the proof-of-work system, whereby blocks are mined to verify transactions, add them to the blockchain and generate new coins, though the energy consumption levels vary greatly for each.
On average, Bitcoin requires 707 kWh of electricity annually, while Ethereum used 62.56 kWh of energy in 2021. It is still possible to use GPU mining systems for Ethereum, whereas Bitcoin generally requires application-specific integrated units (ASICs). As a result of all this, mining profitability calculators show Ethereum to be the more desirable option as the equipment is cheaper and it uses less energy, meaning greater returns. However, big changes are coming soon…
Proof Of Stake
Earlier, we listed proof-of-work as a similarity in the Bitcoin vs Ethereum comparison and that is true. However, in a bid to reduce its carbon footprint, Ethereum will move to the proof-of-stake system in 2022. This is a system that does not incentivise energy consumption in the same way that proof-of-work does. Instead, validators are selected in proportion to their staked holdings in the associated cryptocurrency. Many ‘green’ coins, like Cardano, have successfully championed this method and received acclaim. Once in place, Ethereum’s carbon footprint and environmental output will reduce greatly, leaving Bitcoin on its own as one of the largest carbon emitters of the DeFi world.
Transaction Speed
In terms of transaction speed when comparing Bitcoin vs Ethereum. the latter is the quicker of the two. On average, Ethereum processes around 10-15 transactions per second, compared to Bitcoin’s 3-5. Moreover, with Ethereum 2.0 on the way, the transaction speed for Ethereum is expected to greatly improve again, pulling further ahead of Bitcoin.
Value
There is a large difference in the value of Bitcoin vs Ethereum. In September 2021, Bitcoin was worth around $42,000, whereas Ethereum was worth a mere $3,000 in comparison, over 14 times smaller. In the past, 1 Bitcoin or 32 Ethereum had the same value and Ethereum has been closing the gap, though it remains much lower than Bitcoin’s value.
Pros Of Bitcoin For Traders
- Largest value
- High volatility
- Largest market cap
- Larger trading volume
- Smaller circulating supply
- Most widely accepted cryptocurrency
Pros Of Ethereum For Traders
- High volatility
- More versatile
- Green ambitions
- Lower energy usage
- Slightly lower gas fees
- Quicker transaction speeds
Final Word On Bitcoin Vs Ethereum
Bitcoin vs Ethereum are the two largest and best-known cryptocurrencies. Despite the large age difference (Bitcoin was founded in 2009 compared to Ethereum’s 2015 inception), Ethereum has kept pace with Bitcoin and remained its closest competitor. While Bitcoin dominates in terms of market cap and value, Ethereum is working its way back, bringing constant improvements like Ethereum 2.0, which will drastically lower the carbon footprint and potentially bring many new customers. Both Ethereum and Bitcoin are potentially worthwhile investments and stores of value, follow this comparison to decide which works best for you.
FAQs
Is Bitcoin Vs Ethereum Better To Mine?
For now, Ethereum is considered the better option to mine. However, this will not be possible soon as Ethereum is moving to the less energy-focussed proof of stake system. When this happens, mining will be replaced by staking.
Is Bitcoin Vs Ethereum A Better Investment 2021?
If you are looking to invest, there is no simple answer as to which is better between Bitcoin vs Ethereum. Generally, the price movements show a large correlation and they move up and down together.
Will Bitcoin Vs Ethereum Grow More?
Predicting the future is difficult but it is likely the two giants will continue to grow, even if just through inflation. Many forecasters believe Ethereum could reach and surpass Bitcoin’s market capitalisation.
Does Bitcoin Vs Ethereum Use More Energy?
Bitcoin uses significantly more energy, 707 KWh compared to Ethereum’s 62.56 KWh. This gap is only going to widen as Ethereum moves to a proof of stake model to reduce its carbon footprint.
Where Can I Find Bitcoin Vs Ethereum’s Values?
Both crypto values can be found on CoinMarketCap. The site also lists information such as market cap and trading volume, as well as ranking over 11,000 cryptocurrencies.