Forget Bitcoin! 3 Reasons Why Ethereum Is Superior

Bitcoin is the face of cryptocurrency, but Ethereum could be the top digital asset soon. Canadians who want exposure to the second-largest crypto can opt to invest in Purpose Ether ETF.

| More on:
Choose a path

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn moresdf

The 2008 global financial crisis brought economic shock that caused even top American banks and financial institutions to request government bailouts. Soon after, the first cryptocurrency was established. Satoshi Nakamoto, a person or entity, is the presumed Bitcoin (BTC) developer in 2009.

Since then, the digital currency has become very popular, even if the creator’s identity remains unknown today. Bitcoin rose to fame and introduced crypto investing. Fast forward to 2021, and it’s still the face of cryptocurrency.

Despite ruling the space, Bitcoin hasn’t erased its image as a highly volatile asset. Now, there’s a contender to the cryptocurrency throne. Ethereum (ETH), the world’s second-largest cryptocurrency, could overtake Bitcoin, because it brings so much more to the table.

Not a pure cryptocurrency

Ethereum was created to compete with Bitcoin but in a different way. The rival isn’t a pure cryptocurrency like Bitcoin, which focuses only on the store of value and an alternative medium of exchange to traditional fiat currencies. The creator built a platform where Ether is the native cryptocurrency.

The blockchain platform run programmatic contracts and applications through its own currency. For the layman, Ethereum’s functions are similar to the Apple or Android app stores.

Unlimited supply

Bitcoin has a hard cap of 21 million, which means miners can’t exceed the volume. As of February 24, 2021, the reported number in circulation is 18.5 million. Thus, miners will exhaust the supply when it unlocks 2.5 million more. No one is certain whether the Bitcoin network protocol will change after miners achieve the maximum limit. Ethereum doesn’t have an issuance limit yet, so the supply is indefinite and increases every year.

More adaptable to current needs

Some crypto investors believe the evolving Ethereum platform adapts to the current needs, especially if you’re banking on the future of its blockchain platform. Grayscale Investments’ research director Phil Bonello said, “Investors often look at Ethereum as a growth-type investment, making a bet on the continued development of the decentralized ecosystem built on Ethereum.”

Bonello discusses non-fungible tokens (NFTs); an investor bought NFT art in an auction for US$69 million. Ethereum is the blockchain that hosts NFTs. The new asset could be photos, audio, videos, and other types of digital files.

Ether ETF

Canadians who want exposure to Ethereum can invest in the stock market via Purpose Ether ETF (TSX:ETHH). Purpose Investments, the company behind the world’s first physically settled Ether ETF, is the same group that launched the Purpose Bitcoin ETF.

The Ether exchange-traded fund debuted on April 20, 2022, and currently trades at $11.35. According to Purpose Investments, investors can own a piece of history with its Ether ETF. You don’t have to worry about the tokens’ security or custody, because you don’t need to create a digital wallet or have a key.

You buy real Ether when you invest in the ETF. When you hold the ETF, you also have actual Ether in your portfolio. The ETF trades like regular stocks. Purpose Investment says it’s eligible in a Tax-Free Savings Account or Registered Retirement Savings Plan.

Developing rivalry

BTC owns the first-mover advantage in the cryptocurrency market, although ETH poses a serious challenge. Canadian investors can forget about owning cryptos. If you think ETH is better, consider Purpose Ether ETF that invests directly in physically settled Ether tokens.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. David Gardner owns shares of Apple. The Motley Fool owns shares of and recommends Apple and recommends the following options: short March 2023 $130 calls on Apple and long March 2023 $120 calls on Apple.

More on Tech Stocks

A worker uses a double monitor computer screen in an office.
Tech Stocks

Why Shopify Stock Sold Off Last Week

Shopify (TSX:SHOP) sold off heavily last week. A bad earnings release may have been the culprit.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Tech Stocks

2 Phenomenal Growth Stocks Down 30-60% That Could Rally in the Next Bull Market

Is it time to buy growth stocks? The worst of the interest rate hike and inflation is over, and now…

Read more »

stock market
Tech Stocks

2 Best Tech Stocks to Buy Before the Next Bull Market

Tech stocks such as Roku and Nuvei can help long-term investors generate outsized gains in 2023 and beyond.

Read more »

Wireless technology
Tech Stocks

Tucows Stock Trades Near its 6-Year Low: Is it a Buy?  

Tucows stock fell 63% in the tech stock sell-off and has failed to show any recovery. Is this domain and…

Read more »

Male IT Specialist Holds Laptop and Discusses Work with Female Server Technician. They're Standing in Data Center, Rack Server Cabinet with Cloud Server Icon and Visualization
Tech Stocks

Is Converge Stock a Buy?

A relatively new tech stock could soar higher with the pause in rate hikes, although a resumption of the cycle…

Read more »

online shopping
Tech Stocks

Up by 25%: Is Shopify Stock Finally a Buy in 2023?

The strong rebound in the TSX’s top tech stock remains uncertain. Investors will have to wait before it delivers stellar…

Read more »

Businessman holding AI cloud
Tech Stocks

2 TSX Tech Stocks Innovating Hard in AI

Shopify (TSX:SHOP) stock and another intriguing Canadian gem make good use of AI technologies.

Read more »

worry concern
Tech Stocks

Shopify Stock: Incredible Bargain or Deceptive Trap?

Shopify has quickly shifted from a market darling to something else. Is it a safe buy or risqué bet?

Read more »