Could the Ethereum price track Bitcoin to new record highs?

Darren Abrams, co-founder of Aus Merchant Investments, on the investment theses for the world's top 2 cryptos.

| More on:
A woman crosses her fingers as she flicks a coin into a fountain, hoping for good luck.

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 More

The Ethereum (CRYPTO: ETH) price is up nearly 9% since this time yesterday and more than 15% over the past week.

Ethereum is currently trading for US$4,174 (AU$5,564). That gives the world's number 2 crypto a market cap of some US$492 billion, according to data from CoinMarketCap.

The recent run of gains also sees the token closing in on its all-time highs of US$4,362, set on 12 May this year.

With Bitcoin (CRYPTO: BTC) having just smashed through its own previous record to reach new all-time highs this morning (details here), investors may be wondering whether Ether will be the next major token to break into new highs.

How Ethereum stacks up to Bitcoin

To gain an insight into the different investment thesis driving the resurgent Bitcoin and Ethereum rallies, The Motley Fool turned to Darren Abrams, co-founder and managing director of digital currency provider Aus Merchant Investments.

Abrams told us that, "Bitcoin is to gold, what Ether is to equities. Both have unique pros and cons and both have a place in the larger digital asset ecosystem."

He continued:

Bitcoin and gold are both forms of 'hard' money and the central investment thesis for both assets are that they are an effective hedge against inflation… Unlike the supply off fiat currencies… the supply of both Bitcoin and gold are finite… It's also censorship resistant, as it's maintained by an international, decentralised network of computers, all of which have a copy of that same distributed ledger.

A core difference between Bitcoin and Ethereum, Abrams added, is that, "Bitcoin has limited utility outside of savings and peer-to-peer remittance."

On the other hand, "Ethereum and its native token Ether are far more than a form of digital money. Ethereum's ability to facilitate smart contracts is a paradigm shift from Bitcoin."

Ethereum is a platform, upon which a multitude of decentralised applications are built. These decentralised applications or 'dapps' as they are often referred to, are part of a revolution in the computing space known as web 3.0… While Bitcoin is central to the Web 3.0 movement, it's use case is limited. Ether, and other smart contract blockchains have an almost infinite number of use cases.

Dapps built on Ethereum, Abrams explained, "allow users to: borrow, lend, swap, utilise derivatives, and earn yield on their digital assets in a permissionless manner".

Atop that, "Ethereum by holding the Ether token, affords investors indirect exposure to all dapps built on its blockchain."

First mover advantages

Abrams told The Motley Fool he believes, "Both digital assets will be a useful hedge against inflation and therefore an effective store of value. However, Bitcoin's first mover advantage and simple value proposition means that it will continue to dominate the attention of investors seeking a hedge against inflation."

As for Ethereum, he said, "While Bitcoin has the first mover advantage in the inflation hedge use-case, Ether has the first mover advantage in the smart contract ecosystem."

However, Abrams added this note of caution for the Ethereum outlook:

While Ether's first mover advantage should not be overlooked, Ether has more direct competitors than Bitcoin. Post the 2017 ICO [initial coin offering] craze, there have been very few blockchains trying to rival Bitcoin's dominance as a mode of peer-to-peer value transmission and none have succeeded. Conversely, there are new smart contract platforms that have different value propositions to Ethereum, which are unique to the relevant blockchain's technology stack.

How has the Ethereum price been performing?

One year ago, Ethereum was trading at US$413. At the current Ether price of US$4,177, that represents a gain of 911%.

That's more than double the 400% price gain posted by Bitcoin over the past 12 months.

Will that trend continue over the next months or will Ethereum return to lows of US$1,785 posted on 20 July, or even lower?

Only time will tell.

Should you invest $1,000 in Bitcoin.ℏ right now?

Before you buy Bitcoin.ℏ shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Bitcoin.ℏ wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Cryptocurrencies

Bitcoin coins in a pile.
Cryptocurrencies

What's happening with the Bitcoin price amid the Trump tariff market panic?

You may have heard Bitcoin referred to as ‘digital gold’. But is it really a haven asset?

Read more »

A graphic picture of gold Bitcoins with the Bitcoin symbol lying on a desk with arrows shooting higher and one arrow lifting off the flat surface pointing to the sky.
ETFs

Dip your toes into cryptocurrency with these 2 ASX ETFs

Interested in cryptocurrency?

Read more »

Bitcoin symbol with a rising green arrow.
Cryptocurrencies

Bitcoin surges: How to invest through the ASX

Wanting to gain exposure to the cryptocurrency? Check out these two options.

Read more »

Bitcoin coins in a pile.
Cryptocurrencies

Here's what owning Bitcoin for 7 years has taught me

Bitcoin has been a fantastic investment for me, but not without its pitfalls.

Read more »

A woman holds a bitcoin token in her hand as she smiles at the camera in the background.
Cryptocurrencies

Bitcoin price surges on Donald Trump's cryptocurrency strategic reserve update

The Bitcoin price hit all-time highs of US$109,115 on the day Trump was sworn into office.

Read more »

Bitcoin coin with a rising arrow.
Cryptocurrencies

The Bitcoin price soared 120% in 2024. Could it repeat that performance in 2025?

Bitcoin soared by 150% in 2023 and 120% in 2024, so many crypto investors are expecting it to once again…

Read more »

Two happy excited friends in euphoria mood after winning in a bet with a smartphone in hand.
Cryptocurrencies

Why Bitcoin, Ethereum, and Dogecoin just surged

Today's CPI report turns out to mean a great deal to crypto investors.

Read more »

Bitcoin coin with a rising arrow.
Cryptocurrencies

Bitcoin price smashes new record highs as market value tops US$2.1 trillion

Bitcoin just soared to new all-time highs. But why?

Read more »