Highlights

"Bitcoin is like gold, Ethereum is like oil."

It captures the essence of what the two big cryptocurrencies do. Bitcoin is a store of value you can hold onto, and Ethereum is a tool for doing things like Decentralized Finance and trading NFTs.

One of the main reasons Bitcoin earns its comparisons to gold is its deflationary nature. There will only ever be 21 million bitcoins in existence. So if demand for bitcoin continues to grow, the price of bitcoin will have to go up.

Ethereum is a little different. We don't know how many Ethereum will exist. In fact, we don’t even know how many exist now. We have some rough ideas based on circulating supply, but it doesn't have a hard cap the way Bitcoin does.

Because of that unbounded growth and unknown supply, there isn't the same price pressure on Ethereum as Bitcoin. And as Ethereum critics are right to point out, Ethereum could be subject to many of the same inflationary and price-controlling concerns with fiat money that motivated cryptocurrency in the first place.

But all of that might be about to change. Ethereum Improvement Proposal (EIP) 1559 is set to go into effect sometime in July, and it could give Ethereum the edge it needs to overtake Bitcoin as a deflationary store of value.