ETH VS BTC: Which currency will be the best investment tool in 5 years?

Earlier this year, cryptocurrency exchange Kraken partnered with The Economist magazine to launch a competition for MBAs across the UK to answer a very important question.

Suppose you have $1 million to invest in Bitcoin and Ethereum. You cannot use the money or change the investment quota for 5 years. How much would you invest in each currency and why?

Kraken asked this question to find out, "Which digital asset is the future trend?" In the end, 13 teams participated in the competition, and they explained their research results through a detailed paper and a short video. Through in-depth research, meticulous analysis and skilled speculation, each team presented their evaluation results and final selections to Kraken and the cryptocurrency community.

Kraken is offering $21,000 in cash prizes for this competition. The first place prize is $10,000, the second place is $5,000, the third place is $3,000, and the most popular prize is $3,000.

Here are the investment percentages given by each team:

Each team used a grading system to conduct research. In order to accurately predict the development of the two currencies in five years, they also used financial tools such as Monte Carlo simulation. All teams did not have a preset position on any currency. They used mathematical strategies to analyze the characteristics of ETH and BTC, including:

1. Platform stability

2. need

3. Security

4. Volatility

5. Sentiment Analysis

6. Liquidity

7. flexibility

8. Supply

Some interesting patterns emerged from the submissions. With the exception of Ivey Business School at Western University, which did not recommend any investments, all teams invested in Ethereum. Tuck School of Business at Dartmouth recommended investing only 9% of the $1 million in Ethereum, while Worcester Polytechnic Institute chose to invest 100% in Ethereum.

Scoring Bitcoin and Ethereum using these characteristics allowed each team to curate objective data for their research, while also taking into account other factors that could impact the cryptocurrency world, such as business use cases and projected growth.

Although Bitcoin is currently the world's number one cryptocurrency, most teams believe that Ethereum has the potential to surpass Bitcoin as the network continues to develop. Although Bitcoin does not have an advantage over ETH technically, Bitcoin's current position is attributed to its time of existence and the familiarity of the outside world. Therefore, most teams choose to invest in Bitcoin.

In addition, according to some teams, the value of Bitcoin is higher than that of Ethereum, and it is expected that the price of Bitcoin will increase by 600% by 2020. The decentralized nature of Bitcoin has also laid an important foundation for its steady development, and also determined the security of investment.

Worcester Polytechnic Institute chose to invest 100% in Ethereum, with Porto Business School and Rutgers Business Schools coming in second with 80% investment quotas. Teams that chose to invest 50% or more of their funds in ETH believe that the value of ETH has surpassed that of a simple currency. Smart contracts and the commercial profitability of the Ethereum Virtual Machine (EVM) make ETH a valuable commodity, which Bitcoin cannot do. Investing in Bitcoin is indeed profitable, but most participants believe that this currency has limitations. According to the BYU Marriot School of Business team:

Due to the essential characteristics of Bitcoin, it is difficult for participants to understand the technology and it is difficult for regulators to legislate.

Many other papers contain similar views, which is an important part of the investment strategy. For some contestants, ETH is young but performs better than other currencies. Some even believe that ETH can not only become an important player in the cryptocurrency world, but also create a unique ecosystem.

ETH's cost and transaction trend charts over the past few years prove that by 2020, ETH will increase by as much as 550%. Most participants recognize the potential of ETH. The paper from Worcester Polytechnic Institute wrote:

Many people, including Nathaniel Popper (New York Times reporter), regard Bitcoin as 'digital gold'. The main function of ETH is to record and store transactions. This essential difference between the two makes us firmly believe that ETH is the best investment option in the next five years.

As can be seen from the above chart, Bitcoin has won the favor of more participants with a support rate of 55%. But ETH's 45% support rate proves the trust of participants in it. In short, ETH's potential in the market is obvious and cannot be ignored.