Is Ethereum a good investment?
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Cryptocurrencies are one of the most popular assets nowadays, so investors choose to have digital assets to diversify their portfolios. While some people are attracted to cryptocurrencies only because of their popularity, others have seen the true potential of virtual tokens, as they have reached new heights like no other asset.
Deciding why you want to do this is very important when investing in a cryptocurrency. Also, you need to take into consideration what are the best digital tokens to opt for. The Binance data shows that the most popular cryptocurrencies nowadays are Bitcoin and Ethereum, and they are also the largest digital assets by market cap. Bitcoin is the first cryptocurrency ever created, which inspired all the other virtual coins that have appeared after. Ethereum is the second-largest cryptocurrency and one of the most common options investors choose these days.
To determine whether Ethereum is a good investment or not, we have to take a look at its advantages and the changes which it went through. So, let’s examine together the main important facts.
The continuous success of Ethereum
Ethereum was launched in 2015, and since then, it has gained huge popularity, representing one of the most popular crypto choices. This happened because Ethereum proved to be lucrative for investors in the last few years, so it remains a top choice when investing in digital assets. Also, Ethereum went through many changes that improved its services and showed that it can adapt to the latest trends and move along with the market evolution. For example, after completing the Merge in September 2022, Ethereum’s blockchain became more efficient and cost-effective. Ethereum supporters also believe that the digital asset will go through more upgrades that will trigger an ETH price boost and make the blockchain more attractive to people.
Ethereum has remained the second-largest digital asset for many years, proving it is a good alternative, as not even the crypto winter slowed its growth. And with all the projects and applications based on the blockchain daily, the future can only be positive.
What are the advantages of Ethereum?
It supports decentralized finance applications
Blockchain technology has succeeded in bringing plenty of advantages to the world, and decentralized finance is the best example of this fact. Even if numerous blockchains support DeFi, Ethereum has the reputation of being a leading platform for it. DeFi applications are very popular among crypto users and developers, enabling people to borrow, trade, land and profit from digital assets without relying on third parties like the government or the banks. Decentralized finance presents a great demand at the moment, so ETH is expected to grow in value in the future.
It enables the creation of non-fungible tokens
Ethereum is the platform that started the Metaverse and NFT craze, so it is a very popular platform for those interested in non-fungible tokens. These kinds of tokens are unique virtual assets that vary from digital art to online games and enable people to gain ownership over them. From the rise of the Metaverse, the NFTs have increased tremendously, becoming a million-dollar sector. Ethereum is an essential choice for collectors and creators, which can increase its value.
It has a strong developer community
Ethereum is more than a virtual currency, as it is a complex platform with the possibility to create applications. This has led to a high-spirited and active community collaborating to develop new and interesting applications. The Ethereum platform is home to thousands of smart contracts and dApps for plenty of industries, from gaming to finance and tourism. Because it has many enthusiasts, it is very likely that the blockchain will grow further and bring innovations to the market.
It can have further upgrades
The creators of Ethereum have announced from the start that the Ethereum blockchain will grow together with the market and evolve constantly according to its needs. This is why, when Ethereum had a proof-of-work system which impacted the environment negatively, it soon changed to a proof-of-stake alternative.
It is widely adopted by numerous institutions
Ethereum has also gained popularity among institutional investors and individuals, which benefits its progress. Plenty of famous companies, like JPMorgan and Goldman Sachs, have intended to add Ethereum-based services and products to their operations. Additionally, brands like Microsoft and Intel have joined the Enterprise Ethereum Alliance, which represents a consortium of companies that use the innovative technology of Ethereum to have the possibility of developing new services. This is why the institutional adoption of Ethereum could lead to a price increase.
What are the other considerations you should keep in mind when investing in cryptocurrencies?
Numerous factors impact the price of Ethereum, and those interested in this digital asset need to consider them before deciding to invest. News and media exposure is one of the main important factors that impact the value and price of Ethereum. And with all of Ethereum’s recent upgrades, the cryptocurrency has gained plenty of positive media exposure. Even though the Shanghai and Merge impact wasn’t reflected in the token’s price, the global perception of Ethereum has improved, which can bring new advantages in the future.
However, if you are interested in Ethereum investments, the best ways to approach them depend on your purposes. Also, it will be good to determine what kind of investor you are to figure out what strategy is the best for you. Ethereum might not be at its all-time high, as it was in November 2021, but the market conditions could show possible growth in the future. You also need to keep in mind the volatility of digital assets and invest in them only if you can manage this factor. If you do, Ethereum is a great long-term bet to add to your portfolio, as it has survived the market changes and remained the second-largest digital currency by market cap. Also, all the upgrades and application of the platform makes Ethereum a good choice if you are interested in digital assets.
