Bitcoin Explained
Bitcoin vs Ethereum: The Key Differences for Australian Investors
Key points
- Bitcoin: fixed 21 million supply, built to be scarce digital money.
- Ethereum: a programmable network; ether pays for activity and can be staked.
- Ether has usually moved more than Bitcoin in both directions.
- Many long term investors hold Bitcoin as the core and a smaller Ethereum position.
- Swapping one for the other is a taxable event in Australia.
Bitcoin vs Ethereum at a glance
| Bitcoin (BTC) | Ethereum (ETH) | |
|---|---|---|
| Launched | 2009 | 2015 |
| Main purpose | Scarce digital money and store of value | Programmable network for apps, stablecoins and tokens |
| Supply | Fixed at 21 million coins | No fixed cap; part of fees burned since 2021 |
| How new coins are issued | Mining (proof of work), halving roughly every four years | Staking (proof of stake) since September 2022 |
| Changes to the network | Slow and conservative by design | Regular upgrades on a published roadmap |
| Income | None from holding | Staking rewards, taxed as ordinary income in Australia |
| Main risks | Price swings, rules and tax changes | Price swings, competition from other networks, technical risk |
Sources: the Bitcoin white paper (2008), ethereum.org: What is Ethereum? and ethereum.org: The Merge. Facts as of November 2026.
What is Bitcoin for?
Bitcoin was designed as peer to peer electronic cash with a supply that cannot be inflated. Its rules change slowly, which is a feature: holders know that there will only ever be 21 million coins and that new supply halves roughly every four years (Bitcoin.org: halving history). Most people who hold it think of it as scarce digital property, a long term store of value that sits outside any one government or company.
That simplicity is why Bitcoin is the core of most long term crypto portfolios, and why it is Step H in the 5-step SHIFT Method (Set your plan in writing, Hold Bitcoin as your core, Invest in on-chain businesses with real revenue, Filter every coin before you buy, Take profits on the way up): Hold Bitcoin as your core. Our guide Is Bitcoin a good investment? covers the case for and against.
What is Ethereum for?
Ethereum is a shared computer that anyone can build on. Developers write smart contracts, which are programs that run exactly as written on the network, and those contracts power stablecoins, lending markets, exchanges and tokenised real world assets. Ether is the fuel: every transaction pays a fee in ETH, and stakers lock ETH to secure the network.
Ethereum moved from mining to staking in the Merge on 15 September 2022, which cut its energy use dramatically and reduced new issuance (ethereum.org: The Merge). Our analysts track how much activity and value the network captures. In Ethereum: Should We Be Bullish or Bearish? (Collective Shift, April 2026), the research team noted that Ethereum still leads other blockchains on total value locked and real world assets, while ETH has lagged Bitcoin and competition has grown.
Which has been more volatile?
Both have had deep falls, and ether has usually moved further than Bitcoin in both directions. That pattern fits its role: Bitcoin is the more established, simpler asset, while Ethereum is a bet on a technology platform winning and keeping users. Higher potential upside comes with higher risk.
How long term investors use both
Many long term investors hold Bitcoin as the foundation and a smaller position in Ethereum as their main on-chain business, which is Step I in the SHIFT Method: Invest in on-chain businesses with real revenue. The size of each position is personal. Our guide to how much crypto to own walks through the sizing questions.
Ben explains why he focuses on Bitcoin and a small number of established networks, and how he thinks about the rest. From the Ben Simpson YouTube channel.
Five questions before you choose
- Am I looking for a store of value, a technology platform, or both?
- Can I hold through a fall of 70 percent or more without selling?
- Do I understand how each network works well enough to explain it to a friend?
- Will I stake ETH, and am I ready for the income tax on rewards?
- Where will I store each coin, and who controls the keys?
Tax on Bitcoin and Ethereum in Australia
Both are capital gains tax assets for most investors, so swapping BTC for ETH is a taxable event even though no Australian dollars change hands. Staking rewards are ordinary income when you receive them (ATO: Crypto asset investments). Our crypto tax guide for Australia has the details.
Common myths about Bitcoin and Ethereum
Myth: Ethereum will replace Bitcoin
They do different jobs. Bitcoin competes with gold and other stores of value, while Ethereum competes with other smart contract networks. One does not need the other to fail.
Myth: Bitcoin cannot be used for anything
Bitcoin is used to store and move value without a bank, and it is now held through ETFs by funds and companies. Its simplicity is deliberate.
Myth: a lower coin price means better value
The price of one coin says nothing about value. What matters is the total value of the network and what you expect it to be worth in years, compared with the risk you take.
The quickest way to cut through the noise is to judge each coin on its job, its supply and its risks, then size it in a written plan. That is how Collective Shift members approach both, using the research in the Collective Shift research platform rather than social media tips.
Build a portfolio around Bitcoin with a written plan
Collective Shift has helped 1,000+ members build a written crypto plan with the 5-step SHIFT Method, live analyst sessions and the Live Crypto Portfolio. Founded in Melbourne in 2020 by TEDx speaker Ben Simpson, rated 4.8 out of 5 from 135+ Trustpilot reviews, and Platinum and Accelerator carry a 14-day money-back guarantee.
Quick questions
What is the main difference between Bitcoin and Ethereum?
Bitcoin is designed to be scarce digital money with a fixed supply of 21 million coins. Ethereum is a programmable network that runs applications and smart contracts, and ether is the coin used to pay for activity on it.
Is Ethereum riskier than Bitcoin?
Historically, ether has moved more than Bitcoin in both directions. It also carries more technology and competition risk, because other networks compete to host the same applications.
Does Ethereum have a supply limit?
No. Ether has no fixed cap. Since 2021 part of every transaction fee is burned, and since the Merge in September 2022 new issuance is much lower, so supply depends on how busy the network is.
Can I hold both Bitcoin and Ethereum?
Yes, and many long term investors do. A common approach is to hold Bitcoin as the core and a smaller position in Ethereum, sized to how much risk you can carry.
Can I buy Ethereum ETFs in Australia?
Yes. Ether exposure is available through some ASX listed funds as well as by buying ether directly on a registered exchange. Each route has different fees, custody and tax records.
Is Bitcoin or Ethereum better for beginners?
Neither is right for everyone. Many beginners start with Bitcoin because it is simpler to understand, then learn how Ethereum works before adding it.
Written by Ben Simpson, founder of Collective Shift and TEDx speaker, and reviewed by Matt Willemsen, Director of Research. As of November 2026.
Published 2 November 2026. Updated 2 November 2026.
General information only, not personal financial advice. Collective Shift provides research and education. Consider your own circumstances and speak with a licensed financial adviser before acting.