Bitcoin is way above its previous record, thanks in part to the digital gold narrative that took place among institutional investors in 2020. With those involved in cryptocurrencies considering diversifying beyond BTC, one entrepreneur and crypto trader says Ethereum is the digital version of silver, not Litecoin as it has long been called.
Here is that trader’s case on why Ethereum is better crypto silver than Litecoin, but why the comparison still favors the early core Bitcoin spinoff.
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Bitcoin is the first cryptocurrency developed by Satoshi Nakamoto. Nakamoto’s writings referred to gold when he was trying to create a digital currency that also had the characteristics of a commodity that encouraged its users to “collect” it.
Today there is a better term for collecting BTC: hold. The limited supply of just 21 million BTC makes the asset even more finite than gold and beats the precious metal in almost every way. Bitcoin cannot be counterfeited, does not need to be physically stored or transported, and can be moved at a fraction of the hassle and cost without any security or fear concerns (unless you enter an address incorrectly).
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The digital gold narrative has gained ground in reality, and soon investors might be looking for silver’s digital evolution. Entrepreneur Qiao Wang claims that for those wondering which crypto asset best fits this bill, it is Ethereum, not Litecoin.
Litecoin has long been referred to as digital silver, but Wang used a theory borrowed from Paul Tudor Jones that cryptocurrencies can be “precious” or “industrial” assets.
Litecoin peaked alongside Bitcoin in 2017, while Ethereum and other altcoins followed | Source: BTCUSD on TradingView.com
Which crypto asset is the better digital silver: Ethereum or Litecoin? Valuable or industrial?
The analogy itself makes sense, but Wang’s interpretation may not fit together. There is no reason to devalue Ethereum in favor of Litecoin, and that is not the point that will be made in a moment.
Wang says that Bitcoin is “precious” and Ethereum is “industrial”, but that Litecoin is “neither”. However, this is inconsistent with what the community has already identified these assets as.
Litecoin has already earned the nickname digital silver and has been wearing this crown for years. Ethereum as an “industrial” crypto-asset is correct, which is why it is used as “gas” for transactions.
Indeed, silver is used more industrially than gold, for example in renewable energies. The reason it has value is because it is considered a “precious metal”.
The definition of the term precious simply means something of great value or high price, which is initially subjective. However, in the context of rarity, Litecoin is the closest comparison to Bitcoin. So if you believe in digital gold history, there is no denying that Litecoin is digital silver.
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There’s no reason Ethereum is far more valuable than Litecoin, and that’s why it has a much larger market cap. For crypto investors looking for digital silver, Litecoin is the better direct comparison.
Compared to Bitcoin’s 21 million BTC, there are only 84 million LTC. It is currently the cheapest of the four coins listed on PayPal, which has around 350 users.
If every single user wants to buy even one Litecoin, there is only 0.24 LTC per user. If this type of scarcity is one of the things that make Bitcoin the most magical, it makes no sense why it doesn’t matter to Litecoin either.
The asset was born out of the Bitcoin code, has a similar mechanism for halving block rewards, and much more. Ethereum currently has an offer of 113 million. The maximum total supply is something that nobody knows, but that will make up a lot of gas in the future.
Featured image from Deposit Photos, Chart from TradingView.com