BTC vs ETH
BTC vs ETH: how to allocate between Bitcoin and Ethereum
BTC and ETH are the two foundational crypto assets. The right allocation depends on your conviction, time horizon, and tolerance for volatility, not on which one is 'better'.
Key takeaways
- BTC has lower volatility and the longest track record. ETH has native staking yield and faster historical recoveries.
- BTC and ETH correlations during drawdowns are typically above 0.8.
- Most balanced allocations sit between 60/40 BTC/ETH and 40/60 ETH/BTC.
- A pure BTC or pure ETH portfolio is concentrated by definition, diversification benefit comes from holding both.
Side-by-side comparison
| Attribute | BTC (Bitcoin) | ETH (Ethereum) |
|---|---|---|
| Category | Store of value, monetary asset | Smart contract platform |
| Volatility | Lower | Medium |
| Liquidity | Deepest | Deep |
| Drawdown history | Three cycles of 75%+ drawdown since 2014 | 80%+ drawdowns in 2018 and 2022 |
| Yield option | No native yield. Wrapped variants offer 1-3% with platform risk. | 3-4% staking APY native to the protocol. |
| Core thesis | Longest track record, highest liquidity, simplest fundamental story. | Largest smart contract platform, fee-burn supply mechanics, native yield. |
Which allocation fits which investor
Long-term store-of-value investor
BTC-heavy (60-70% BTC)
DeFi-native, productive-asset investor
ETH-heavy (60% ETH) with staking
Balanced 'I do not want to choose'
50/50 or 60/40 BTC/ETH
Risk-averse with cash sleeve
40/30/30 BTC/ETH/stablecoins
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