Diversification is Key
Just like investing in different stocks, diversifying your crypto portfolio is important. It helps protect against uncertainty. Ethereum’s market cap is still smaller than Bitcoin’s, so adding it to your portfolio can spread your risk.
Ethereum’s Functionality
While Bitcoin is designed to be a new form of money, Ethereum is a platform for building new applications. This includes everything from stablecoins to decentralized finance (DeFi). By investing in Ethereum, you’re betting on the growth of these innovative technologies.
Historical Performance
Historically, portfolios that included Ethereum have performed better than Bitcoin-only portfolios. They’ve had higher returns and lower risk. However, it’s important to remember that past performance doesn’t guarantee future results.
Why a Bitcoin-Only Strategy Might Be Better
Some investors prefer to focus solely on Bitcoin. Here’s why:
- Dominant Position: Bitcoin has a large lead in the crypto market, and its community is focused on making it the new form of money.
- Simplicity: Bitcoin’s use-case as digital gold is clear and appealing to some investors.
Conclusion
If you want to make a broad bet on crypto, consider diversifying with Ethereum. If you’re looking for a specific investment in digital money, Bitcoin may be a better choice.
