1 Bitcoin or 32 Ethereum!?
Which will make you richer in the future??
What is the best long term HODL??
Those are very important questions especially as we near the bottom of this bear market…because
there might not be a better chance ever to accumulate at these levels.
Well with this episode I’m going to be as level as possible with my decision…because
it’s time for Chico Crypto!!
1 Bitcoin….by having a whole Bitcoin you own 1 of 21 million of an asset whose supply
can never increase.
Bitcoin is the first truly scarce asset to ever hit our world & by owning one, you get
to join a special club…the 21 million club, as there could only be 21 million people who
could own a full Bitcoin.
Checking out this chart of average Bitcoin holding per user we can see as of 2020…
just .2 of a BTC was the average holding, but by 2030…this number rapidly decreases
to just .02 of a BTC.
In eight short years, the average holding of a bitcoin investor will be just 2 percent
of a Bitcoin.
This is because the price should be wayyy higher, and that is what investors can afford.
Just 2 of the asset.
Which means having 1 Bitcoin will put you in the elite club of the rich if Bitcoin fulfills
its destiny as the world's first global monetary network.
Now according to the most recent data, there were about 56.1 million millionaires in the
world.
That means that every millionaire couldn't even own a full BTC.
Shoot as we can see from the article, the United States alone has over 21 million millionaires.
Every US millionaire couldn’t own a full BTC, even if they wanted to.
I’ve been saying this since I started my channel.
This alone could push Bitcoin eventually up to the 1 million dollar mark.
Having a full Bitcoin in the future will be seen as a power symbol.
Like having that BIG mansion or that million dollar supercar.
Now what about Ethereum!?
Well Ethereum is unlinke Bitcoin in that the supply isn’t capped.
As of right now, there is over 120 million Ether.
So by having 1, you join the 120 million club.
But what about owning 32…well if you own 32 ETH you join the 3.75 million club as with
current supply, there are only 3.75 million people who could own that amount.
So having 32 Ethereum is actually scarcer than having a full bitcoin.
Based on the number of active addresses, which is over 202 million…divided by the ETH supply,
which is over 120 million, we can come to the conclusion, the average holding of ETH
per address is .60 of an ETH.
Now this is pretty astonishing..as back in 2018, we can see from this article from Consensys,
the average holding per address was 2.17 ether.
So we can assume by 2030 this number will be far lower, I wouldn’t doubt it’s just
.1 or less.
Ethereum scarcity is apparent, even with a supply which is over 5.7x’s higher than
Bitcoin’s final supply.
But now…let’s talk about the most important thing.
The current cost to own 1 Bitcoin or 32 Eth.
Looking at the price of Bitcoin, to obtain a full one, you would need over 23 thousand
dollars.
Looking at Ethereum’s price, it's just over 1700 dollars for one.
That number multiplied by 32, is nearly 55 thousand dollars.
It’s more expensive to purchase 32 ETH, than it is to buy a full Bitcoin.
It’s over twice as expensive.
But it wasn’t always like this….
As we can see from this chart, at the beginning of 2020, the 32 ETH to 1 Bitcoin ratio, was
around .50, which meant 32 ETH was half as expensive as 1 BTC.
From August of 2020 to April of 2021, the ratio jumped around 1 to 1…but since then
32 Ethereum has jumped above 2:1 and is staying there.
And guess who called getting Ethereum when the ratio was 1 to 1!?
You’re boy Chico did, In a similar video posted in October of 2020.
After my comparison breakdown…I came to this conclusion.
Yup, back then I picked 32 ETH as they were planning to roll out staking on the network
which as we know is live, with the full deployment of it being just around the corner.
So do I still think like this?
Is 32 Ethereum the better HODL than 1 Bitcoin?
Well…Ethereum Staking is here now…and for holding 32 Ethereum you can become an
ETH2 validator, securing the chain.
Checking out data on current staking rewards, we can see if you run your own validator,
the average earning is just above 4.5 percent.
Now, Bitcoin is proof of work, so there is no way to “stake” your Bitcoin and earn
rewards.
By holding Bitcoin on Bitcoin’s chain, you are just hoping that the price increases.
There are no chain rewards unless you own a Bitcoin miner and that is the way it’s
going to say
Ethereum has mining as of right now, but by next month, with the mainnet merge the miners
of Ethereum will be the staking validators.
Next month, miners will be getting ETH2 block rewards like they have been receiving, but
they will also get a BIG ole freaking bonus…the Ethereum transaction fees.
Checking out cryptofees, we can see that Ethereum transaction fees over the past 7 days have
averaged just about 2.7 million dollars.
Every single cent of those fees, will be distributed to the ethereum stakers, boosting their rewards.
That means the APR is going to jump….but by how much?
Well a Sam on twitter calculated it, using early August Data, and they came to the conclusion
that staking rewards will jump to nearly 5.9 percent post merge.…
Although, this will get even higher when the markets return bullish.
Remember his APR calculation is using transaction fees of around just 2.7 million dollars.
This is low, low, low…as we are in the depths of a bear market.
Looking at cryptofees during the hype of last year, in November to be exact, we can see
average fees over 7 days was over 72 million dollars.
With those types of fees, we could expect APRs for staking to be somewhere between 10
to 20 percent if all things stay the same…
Sooo, passive rewards that will only increase for holding Ethereum….while Bitcoin just
has the hope of increasing prices…
But what about ecosystem development?
As we know, Ethereum has DeFi on lock…going to DeFi Llama we can see Ethereum has over
58 percent of DeFi on it’s chain, with total value locked up equallying 40 billion dollars.
The next biggest is Tron, with only 5.88 billion.
To find Bitcoin’s DeFi, we have to scroll way down to position number 27.
Bitcoin only has 124.7 million locked up in it’s DeFi ecosystem.
Why is this?
Well Ethereum has stolen DeFi from Bitcoin with wrapped versions of the asset.
There is wrapped Bitcoin, which as we can see has a circulating supply of over 236 thousand.
That means, 236 thousand Bitcoin have left the Bitcoin ecosystem to come over to Ethereum
DeFi, so they can earn passive income on the asset, through DeFi borrowing/lending and
more.
That isn’t the only wrapped version of Bitcoin on Ethereum, coingecko has a tokenized Bitcoin
page and as we can see there is Huobi BTC, renbtc, sbtc, tbtc and more.
But what about institutional adoption?
Who takes the cake there?
Well there is no doubt it’s Bitcoin…buybitcoinworldwide has a great webpage which shows the institutions
and public companies that have Bitcoin on there balance sheet…it's a long list, plus
they countries that have Bitcoin in there treasuries, as well as private companies,
and Bitcoin ETFs.
Ethereum cannot compete with this, but things are starting to change in Ethereum’s direction.
In February of this year, it was announced that KPMG, was going to add crypto assets
to it’s balance sheet, one of them was Bitcoin and the other was Ethereum…and I have a
feeling this tide will only continue…as Ethereum is getting it’s regulatory clarity
along with Bitcoin
Just last week a Senate bill was introduced and it will consider only two assets as commodities
as of now…that would be Bitcoin and Ethereum.
Having Ether lawfully in the commodity basket along with Bitcoin would bring waves of new
institutional adoption.
So what’s my decision?
Well if you couldn’t tell from the tone of the video…I still think 32 Ethereum is
the better long term HODL than 1 Bitcoin, even if the price is twice as high.
Cheers viewers I’ll see you next time!