Bitcoin and Ethereum are the two largest crypto-assets by market cap. The ‘blue-chip’ assets of the crypto world, both are well-known, popular (but risky) investments. Is one a better investment than the other for 2025? Let’s take a look at market trends and analyse their outlooks.
Bitcoin and Ethereum are very different
Before we discuss the best investment for 2025, it’s worth touching on the differences between Bitcoin and Ethereum. Because while they both play important roles in the crypto ecosystem, they are quite different in nature.
Launched in 2009 by Satoshi Nakamoto (a pseudonym), Bitcoin (BTC) is designed to be an alternative to traditional fiat currencies. Underpinned by blockchain technology, it is not managed by any central authority or government (meaning that it can’t be manipulated like traditional currencies can).
One reason people like to invest in Bitcoin is that it is seen as a ‘digital gold’. However, it’s worth pointing out that Bitcoin is far more volatile than gold and in the past, it has not acted as a ‘safe-haven’ asset like gold historically has.
Turning to Ethereum (ETH), it’s a programmable blockchain technology that was launched in 2015 and enables decentralised applications to be built and run on it. When people talk about trading Ethereum, they’re actually talking about trading ‘Ether’ – a token designed to fuel the Ethereum ecosystem.
People like to invest in Ethereum because the technology has the potential to revolutionise various industries. Given that Ethereum facilitates smart contracts (self-executing contracts with the terms of the agreement directly written into code), it potentially has applications in financial services, law, property, and many other industries.
The best crypto-asset for 2025
As for the best investment for 2025, my personal view is that it’s Bitcoin. There are a few reasons why.
Firstly, it’s the largest and most well-known crypto-asset today. Therefore, it’s probably likely to see more interest from traditional investors looking to enter the crypto space. If a traditional investor wanted to add some crypto exposure to their 60/40 portfolio, I think they are more likely to buy Bitcoin than buy Ethereum. Ultimately, Bitcoin is the flagship asset of the crypto world.
Secondly, Bitcoin is attracting significantly more institutional interest than Ethereum at present. For example, between 5 February and 21 February, Bitcoin ETFs in the US saw $40 billion in inflows. For Ethereum ETFs, it was just $3 billion. In other words, the big money is going into BTC at the moment.
Third, Bitcoin has tighter supply. Bitcoin has been designed so that there will only ever be 21 million Bitcoins. And a lot of these have probably been lost over the years (hundreds of millions worth of Bitcoin are buried in a Wales council tip). By contrast, Ethereum does not have a maximum supply, meaning it’s an inflationary crypto-asset.
Finally, from a technical perspective, Bitcoin has far more momentum at present. Over the last year, BTC is up about 80% while ETH is down about 20%. Meanwhile, BTC is currently well above its 200-day moving average while ETH is below its 200-day moving average. Given that these crypto-assets can’t be valued using traditional valuation methodologies, I see momentum as an important factor when investing in this asset class.
Of course, there is a chance that Ethereum could outperform Bitcoin this year. After all, the ratio of Ethereum to Bitcoin recently hit a four-year low. But my view is that in the medium term, Bitcoin will continue to be the better investment. So, it’s my pick for 2025.
Based in London, Edward is a distinguished investment writer with an extensive client portfolio comprising a diverse array of prominent financial services firms across the globe. With over 15 years of hands-on experience in private wealth management and institutional asset management, both in the UK and Australia, he possesses a profound understanding of the finance industry.
Before establishing himself as a writer, Edward earned a Commerce degree from the prestigious University of Melbourne. Complementing his academic background, he holds the esteemed Investment Management Certificate (IMC) and is a proud holder of the Chartered Financial Analyst (CFA) qualification.
Widely recognized as a sought-after investment expert, Edward’s insightful perspectives and analyses have been featured on sites such as BlackRock, Credit Suisse, WisdomTree, Motley Fool, eToro, and CMC Markets, among others.
You can contact Ed at edward@goodmoneyguide.com
