Bitcoin vs. Ethereum: what’s the difference?

Side by side

	Bitcoin	Ethereum
Launched	2009	2015
Created by	Satoshi Nakamoto, a pseudonym	Vitalik Buterin and co-founders
Main purpose	Digital money and store of value	Platform for smart contracts and applications
Supply	Capped at 21 million; about 20 million mined	No fixed cap; part of each transaction fee is destroyed
How the network is secured	Proof of work (mining)	Proof of stake (staking) since September 2022
Energy use	High	Fell by an estimated 99.95% after the switch to proof of stake
Price, late September 2026	About $84,400	About $2,670
Record high	$126,198 (October 6, 2025)	Nearly $5,000 (August 2025)
U.S. spot ETFs	Since January 2024	Since July 2024

What bitcoin is for

Bitcoin was the first cryptocurrency, created as a way to send value online without a bank in the middle. Its rules are deliberately simple and hard to change. New coins are created as a reward to “miners,” who use computing power to secure the network, and that reward halves roughly every four years. The 20 millionth coin was mined in March 2026, and the last is expected around 2140.

Most people who buy bitcoin today hold it as a long-term store of value, the “digital gold” idea, rather than to spend it. Our bitcoin vs. gold guide looks at how well that comparison holds up.

What Ethereum is for

Ethereum lets developers run programs on a shared network. Those programs power stablecoins, lending and trading services, digital collectibles and many other tokens. Every action on the network costs a fee paid in ether, which gives ether its use.

Since September 15, 2022, when the “Merge” upgrade switched Ethereum from mining to staking, the network has been secured by holders who lock up ether as collateral and earn rewards for helping to validate transactions. Ethereum has no fixed supply cap, but part of every transaction fee is destroyed, which offsets some of the new ether issued to stakers.

The risks

Both are volatile, lightly protected and exposed to changes in regulation. Neither is covered by FDIC or SIPC protection when held on an exchange, and both are targets for hackers and scammers. See how to buy bitcoin safely.

Bitcoin’s mining uses a large amount of electricity, which draws criticism, and its long-term security depends on transaction fees as mining rewards shrink.

Ethereum’s flexibility brings more ways for things to go wrong: bugs in smart contracts, hacks of applications built on it, and competition from other platforms.

What about other cryptocurrencies?

There are thousands of other coins. The largest categories are:

• Stablecoins, tokens meant to hold a steady $1 value. The biggest dollar stablecoins say they’re backed by cash and short-term Treasuries. The GENIUS Act, signed in July 2025, sets the first federal rules for regulated U.S. payment stablecoins, including a requirement for one-to-one reserves. Its main requirements take effect in January 2027 at the latest, or sooner if regulators finish their rules first.
• Other platforms that compete with Ethereum for applications.
• Smaller tokens, many of which are highly speculative. A large share of small coins have lost most of their value or disappeared entirely.

Owning them

Both can be bought through spot ETFs in a brokerage account or IRA, or directly on a U.S. exchange that’s registered with FinCEN and licensed in your state. Those registrations aren’t an SEC approval. When the first spot ether ETFs launched in July 2024, they weren’t allowed to stake, so owning ether directly was the only way to earn staking rewards; check a fund’s current prospectus for its policy. How to buy bitcoin safely covers the steps, which are the same for ether.

Taxes

The IRS treats both as property. Selling, trading or spending either can create a capital gain or loss, and staking rewards are taxable income when you gain control of them. See how bitcoin is taxed.

Frequently asked questions