Better Buy: Ethereum vs Shiba Inu

Ethereum (ETH) -0.47%, And Shiba Inu (Shib 2.52%, Both have taken center stage in the world of cryptocurrency. Ethereum is the second largest player in the world by market cap – and has climbed over 400% in the past five years. Shiba Inu is a new player who has a dog breed as a mascot. It has become popular on social media and has grown by 45,000,000% just last year.

Ethereum and Shiba Inu have declined in line with the general cryptocurrency market so far this year. This creates an entry point for anyone looking to step into the crypto market – or expand positions there. So, which of these cryptos is the better buy right now? Motley Fool contributors Adria Cimino and Keith Spites present purchase cases for each.

A market leader ready to be ahead

Adria Cimino (Ethereum): Ethereum is already a leader in two key areas – decentralized applications (DApps) and non-fungible tokens (NFTs). Around 2,900 DApps run on Ethereum, State of the DApps data shows. And according to CryptoSlam, Ethereum is the biggest player in the NFT market by sales volume. These sectors are important as they play a vital role in reshaping the world of business and entertainment.

Another plus is the fact that Ethereum has attracted a lot of developers to its blockchain. And that trend continues. In fact, 20% to 25% of developers who want to work in the areas of decentralization and blockchain regularly visit Ethereum, Electric Capital’s research shows. And last year, monthly active developers on Ethereum grew 42% from January to December. So the people who are building the future of cryptocurrency are doing so on Ethereum.

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And, finally, a catalyst may lie ahead for this cryptocurrency leader. Its biggest weakness has been transaction speed — and high fees. But Ethereum is in the midst of a multi-stage upgrade that should put an end to these problems. The next step – the move to a proof of stake verification system – is due in the third or fourth quarter. If all goes well, this could provide a lift to Ethereum in the near term. And in the long run, it gives Ethereum the necessary features to attract more and more users.

An underdog with more room to run

Keith Speights (Shiba Inu): I will readily admit that Ethereum has more utility in the real world than Shiba Inu. It is arguably less risky than a Shiba Inu. However, there’s a reason Ethereum whales have been buying more Shiba Inu than other cryptocurrencies lately: the underdog meme coin may have more room to run.

For one thing, the Shiba Inu has fallen far more from its 52-week high than Ethereum. More importantly, however, Shiba Inu has more potential catalysts in the near term than Ethereum.

The Shiba Inu’s Shibarium Layer-2 solution is expected to be launched in the third quarter of 2022. This launch will lead to the burning of SHIB tokens. It will also reduce transaction fees and should make the Shiberium ecosystem more attractive to developers. The launch of the Shiba Inu metaverse may happen soon.

Certainly, the Shiba Inu does not compare favorably with Ethereum in some ways. However, for anyone willing to take on a higher level of risk, the token could deliver much higher returns than Ethereum over the next few years.

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Ethereum or Shiba Inu?

Catalysts on the horizon could yield similar benefits for the Shiba Inu. But as Keith noted above, the Shiba Inu represents a very risky bet – even in the already risky world of cryptocurrency.

Ethereum has already proven its real world usefulness and is a favorite among developers. And we have seen this blockchain grow over time. So, right now, there is more reason to be confident about Ethereum’s long-term prospects than Shiba Inu. And this makes Ethereum a better option for most investors.

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