How closely does ETH follow BTC?

The truth about cryptocurrency price correlation in 2021

Ethereum and Bitcoin are arguably the two most famous crypto coins right now as their market value clearly reflects it. They are currently sitting at $1,8k and $50k respectively. In the eyes of the general public, these were always perceived as gateways to the world of digital coins. They share a lot of similarities, both structurally, and in the way they perform, but as the years went on, the gap was getting increasingly larger. Let us examine these two coins more closely.

In essence, they are both non-centrally issued, digital currencies that operate using the proof-of-work consensus. What this means is that they both require a network-wide consensus of nodes in order to verify and confirm their transactions. As a result, they can be slower when it comes to transaction processing.

Biggest Difference

Even now, Ethereum is faster than Bitcoin. While BTC normally processes 3-5 transactions per second, ETH can manage a far superior 10-15. This gap is only going to get bigger in the future with the upcoming 2.0 upgrade for Ethereum allegedly providing vastly faster transactions, among other things. Another dividing component that separates ETH from BTS is the smart contacts. This is a feature closely associated with Ethereum blockchain. In essence, they are simply digital contracts with a variety of potential applications.

When it comes to trading and price stability, for now, Bitcoin comes out as a clear winner. Its success is one of the major reasons traders became heavily invested in the crypto market. While BTC is a clear winner in terms of raw value, from the very beginning, the two coins were very closely and positively related. Once Bitcoin rises or falls, the same happens to Ethereum. Historically, Bitcoin has had around four times higher market capitalization, so it is only natural that is less unstable in its price action.

History and Performance

Bitcoin has been a leader of most price rallies. It has had several major surges over the last couple of years, each time breaking new grounds in the crypto market. Back in 2017, its price skyrocketed to $20,000, and it was closely followed by the rest of the altcoin market. This marked the first time the cryptocurrency industry left the shadows and joined the mainstream. Since then, BTC has continued its steady climb, culminating in a value of $50,000 in February of 2021.

Ethereum was closely following in Bitcoin’s path. It reached a price of $1,440 in early 2018 and has fluctuated since, matching the highs and lows of its sibling coin. In early 2021, it has reached its all-time value of $1,800. Nowadays, investors are mostly interested in ETH because of its long-term potential. There are major claims it will revolutionize the industry with higher speeds, efficiency, security, and many other benefits with its 2.0 iteration.

Which One is a Better Buy in 2021?

The main question on many traders’ minds right now is – which coin is a safer investment in 2021? The answer is not that easy because both show a lot of potential, and a lot of space to grow. For example, Bitcoin is known to have massive price hikes after halving events – a process that cuts in half block rewards for miners. Last such event took place in May 2020, and the surge did not disappoint. Some believed it was also caused by institutional interest, and that the price could go even higher since the demand is not lacking.

Ethereum investors are looking forward to the major overhaul in the 2.0 version. The implications of these alleged benefits could transform the entire industry, so it is no wonder that traders are hyped about the potential price surge. Despite what some of the general public might think, these two coins are not rivals. They simply exist in the same market, but with very different goals and purposes, each with its own uses and potential. Choosing between them comes down to your own end goals.

There will be plenty of opportunities in the year ahead, so if the crypto market is something that interests you, feel free to log in to your account at and start trading your coins. As more and more investors start embracing the crypto market, its potential is likely to rival if not exceed the traditional financial markets.

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