In December 2024, CP Media took an in-depth look at Bitcoin’s prospects. Since then, anyone interested has had the chance to see that our conclusions were accurate. Now there’s growing interest in analyzing Ethereum relative to Bitcoin, reflecting a well-established narrative of rivalry between the first cryptocurrency and the largest altcoin.
However, during the research process, it became clear that Ethereum should be examined as a phenomenon of its own right. Direct comparison with Bitcoin is of limited value.
So, why aren’t Ethereum and Bitcoin direct competitors? What’s the outlook for Ethereum as a project and for ETH as a cryptocurrency? And why frame the question this way? Let’s break it down step by step.
Important: The information presented here is for discussion purposes only. It shouldn’t be considered investment advice.
Why Ethereum and Bitcoin Aren’t Competitors
Ethereum and Bitcoin were built with fundamentally different goals in mind. Put simply, Bitcoin was designed as a decentralized payment system, while Ethereum was conceived as a decentralized computing environment.
In other words, Bitcoin serves as a medium of exchange, a store of value, and a unit of account — essentially, a cryptocurrency in the sense most users understand it. Ethereum, by contrast, is an infrastructure platform that enables a wide range of use cases for cryptocurrencies.
If Bitcoin can be loosely compared to the U.S. dollar, then Ethereum is closer to an entire financial system. Can they really compete? Hardly. Still, it’s worth noting that when we talk specifically about the BTC and ETH tokens, the situation looks somewhat different.
We also recommend reading an article that explains what a token actually is in greater detail: Everything You Need to Know About Tokens
Why ETH and BTC Still Compete
Those who care about precise terminology have probably noticed that, in the previous section, the author committed a minor linguistic offense. Technically, it’s BTC that serves as a medium of exchange, a store of value, and a unit of account — in other words, a cryptocurrency in the sense most users understand the term. Bitcoin, on the other hand, is the name of the blockchain network that provides the underlying infrastructure for this cryptocurrency.
It’s BTC that people buy and sell, use for payments and transaction fees, and invest in. The Bitcoin blockchain, in turn, processes these transactions and records their complete history.
The core functions of ETH are essentially the same, but within the Ethereum blockchain. In that sense, BTC and ETH are roughly as similar as, say, the U.S. dollar and the euro. This is the context in which their so-called competition is usually mentioned — as competition between the two largest cryptocurrencies by market capitalization.
Some especially meticulous — or, to be more precise, detail-oriented — experts even argue that Bitcoin isn’t really a cryptocurrency at all but rather a unique form of money. That’s more of a philosophical distinction, though.
So yes, ETH and BTC do compete as cryptocurrencies that have measurable value. They compete primarily by market metrics — such as price, capitalization, and transaction volume, among others. But that doesn’t mean Ethereum and Bitcoin compete as projects.
The Outlook for Ethereum as a Project
Because of its very nature, Ethereum is a far more ambitious project than Bitcoin. That said, Bitcoin will always remain the first cryptocurrency and, most likely, the largest one by market capitalization. Its dominance is rooted in history, public perception, and the symbolic role BTC has already secured in the global market.
But does Bitcoin aspire to become the financial infrastructure of the future? No. Ethereum does.
In May 2025, the Ethereum team announced an initiative aimed at transforming the network into foundational infrastructure for online projects and the global economy — one capable of matching banking and government systems in terms of security.
Since then, several other ambitious plans have been unveiled, including:
- Strategic development plan for the next decade
- Upgrades to privacy-enhancing tools
- Optimization of the blockchain’s core-layer architecture, and much more
Meanwhile, Ethereum continues to be supported by the most active community of blockchain developers. During the first nine months of 2025, the number of programmers working on projects within the Ethereum ecosystem surpassed 16,000. Of course, not all of them are focused on improving the core network, but there are enough contributors to keep many of the announced initiatives moving forward.
For instance, the team has introduced a virtual machine designed for future network scaling, emphasizing ZKP solutions and post-quantum security. Work on privacy technologies is also expanding at a steady pace.
To find out who drives Ethereum’s blockchain development and how it actually works, check out CP Media’s special report.
It’s fair to say that Ethereum is evolving rapidly, and the project’s prospects look promising. Although it’s a decentralized system, it has both a governance structure and an active developer community. It also has a clear sense of direction, a solid resource base, and a fully developed infrastructure ecosystem — including Layer 2 and Layer 3 networks, sidechains, and various cross-chain protocols connecting Ethereum with other major blockchain ecosystems.
In practice, Ethereum has already become the core and the largest hub of the decentralized finance ecosystem. The project continues to grow dynamically, adapting to user demand, introducing technological innovations, meeting regulatory expectations, and integrating ever more deeply with traditional finance — from issuing bank-backed stablecoins and enabling tokenization to deploying Layer 2 corporate solutions.
It’s also worth noting the many non-financial applications built on Ethereum’s ecosystem, such as Bhutan’s national digital identity system.
So, what do you think about Ethereum’s prospects as a project? To me, the answer seems obvious — even at first glance.
The Outlook for ETH as a Cryptocurrency
The prospects of the largest altcoin — as ETH is often called — are inseparable from the outlook and unique features of the Ethereum project itself. This link exists primarily because the more actively the main network is used, the higher the demand for ETH as a means of paying transaction fees.
It’s also important to note that after Ethereum’s successful transition to the Proof-of-Stake consensus mechanism, the project’s tokenomics changed dramatically. ETH issuance now occurs as rewards for validators who stake a part of their cryptocurrency to help secure and maintain the network. At the time of writing, about 30% of all ETH in circulation has been staked. This share continues to grow steadily, as staking effectively turns ETH into an income-generating financial instrument. The average annual yield (APR) for Ethereum validators ranges from roughly 2.5% to 4.5%, depending on various factors — though that’s a topic for another discussion.
Another key element is that the Ethereum mainnet operates under the EIP-1559 mechanism, which permanently removes a portion of ETH from circulation by burning part of the transaction fee (the base fee) with every transaction. The more active the Ethereum network becomes, the larger the volume of ETH that gets burned.
The base fee is a variable metric that depends on network congestion, gas prices, and overall user activity. It can fluctuate anywhere from 30% to 300% of the ETH issued through validation.
Technically speaking, ETH functions as a deflationary asset. The structure of Ethereum’s tokenomics creates a natural scarcity that directly influences its market value.
Major investors have clearly recognized ETH’s potential. Institutional and corporate market participants now hold over 10% of Ethereum’s total supply, with combined investments exceeding 12.5 million ETH.
The majority of these holdings are concentrated in spot Ethereum ETFs, which account for about 6.77 million ETH, while corporate reserves in the underlying asset stand at roughly 5.74 million ETH.
There’s also a steady upward trend in institutional investment in Ethereum. This growing demand is expected to strengthen the asset’s scarcity and, consequently, its value.
At this point, it’s worth looking back at the previous section and correlating Ethereum’s development trends as a project with the specifics of ETH as a cryptocurrency. Still, it’s up to each reader to draw their own conclusions about the future of Ethereum and ETH. The information presented here is meant solely as a point for reflection — a starting point for independent analysis.
