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Is Ethereum A Good Investment And Should I Invest In ETH?

Ethereum could be the next trillion-dollar cryptocurrency!

8 Min Read
Last Updated April 15th 2021

Wondering if now is a good time to buy Ethereum? Or maybe you’re not sure if Ethereum is safe to invest in?

If you are new to the world of Ethereum investing, you might be wondering if Ethereum is a good investment, or should I invest in ETH?

Well, the easiest answers to those two questions is yes - Ethereum is likely a good investment and investing in Ethereum could pay off big time.

One of the biggest reasons to invest in Ethereum is Ethereum 2.0, an upgrade of Ethereum’s algorithm that will transition it from proof of work to proof of stake.

Phase one of the upgrade started on the 1st of December 2020 with ‘Beacon Chain’ and there are a further two phases that supposedly should be completed by the end of 2021.

If the transition is successful, it may increase the price of Ethereum immensely. But that’s just one of many reasons why investing in Ethereum could be profitable.

In this article, we’ll break all Ethereum-related myths circulating online and help you come to your own conclusion on if you should consider investing in Ethereum.

In this guide we will cover:

So, what is Ethereum? A simple explanation

Ethereum Investing: Getting Started

Is Ethereum A Good Investment?

Should I Invest In Ethereum?

Should I Invest in Bitcoin or Ethereum? Will Ethereum ever overtake Bitcoin?

How Much Could Ethereum be Worth?

Who Should Include Ethereum In Their Portfolios?

Is Investing In Ethereum Risky? Could Ethereum be a bad investment?

Conclusion: Is Ethereum a Good Investment?

How to invest in Ethereum?

FAQs

So, what is Ethereum? A simple explanation

Ethereum is the most popular open-source platform that employs blockchain technology in the world.

In fact, Ethereum is the second-largest crypto platform by market cap after Bitcoin. Ethereum uses its own token, ether (ETH), to power transactions on the Ethereum blockchain. 

But Ethereum also supports different tokens, such as ERC-20 tokens (Binance Coin and Tron both started out on the Ethereum blockchain!).

That said, Ethereum has numerous applications beyond peer-to-peer digital transactions.

Ethereum can be used to create smart contracts, digital agreements written in code that can help users make agreements and payments directly with each other without a third party.

But that’s not all (we’ve barely scratched the surface!). Perhaps, more importantly, is decentralised applications or ‘dApps’, which are distributed in a decentralised manner and built on top of the Ethereum blockchain.

dApps have also fuelled the rise of DeFi (decentralised finance), providing lending, borrowing, trading (though DEXs - decentralised exchanges) and insurance services among a vast number of other things.

All of this activity has created an exciting ecosystem where Ether flows effortlessly. 

It’s really not surprising that Palm Beach Confidential editor Teeka Tiwari believes that Ethereum may soon be the next trillion-dollar crypto, and others believe that it may even one day overtake Bitcoin!

Ethereum Investing: Getting Started

To start investing in Ethereum you first need to register online with an exchange that will allow you to buy and invest in Ethereum.

An exchange broker is an online platform that enables you to buy and sell Ethereum as well as any other cryptocurrency that they have listed.

If you want to buy and invest in Ethereum quickly and easily with 0% commission, check out eToro Exchange!

Is Ethereum A Good Investment?

As Ethereum is the second-largest blockchain platform, many crypto experts believe that Ethereum is a good investment compared to other cryptos. Despite all the ups and downs in Ethereum’s history, analysts believe that Ethereum’s price could grow further in the long-term.

One of the factors that will influence investing in ETH in 2021 is Ethereum 2.0, the second iteration of Ethereum.

Ethereum 2.0 will focus on energy efficiency and staking instead of mining. Note that proof of stake involves the active transaction validation and network support by holding funds in a crypto wallet to ensure safety.

Another reason to consider investing in Ethereum is the increasing use of blockchain technology, which attracts more and more successful crypto traders. Such technology can facilitate online payments, loan distribution, and commodities trading.

Should I Invest In Ethereum?

is ethereum a good investment

Why Should I consider investing in Ethereum? Well, Ethereum is an innovative technology that can change the whole world. To be more precise, Ethereum has introduced dApps and smart contracts that allow users to make transactions without a middleman. Thanks to the introduction of smart contracts, Ethereum can revolutionise computer programming and digital ownership as a whole.

People will be able to buy different assets from all over the world without dealing with banks and bureaucracy. Ethereum also allows the tokenisation of artwork, patents, mortgages, person-to-person transactions, and even voting. 

No surprise that according to data provided by the World Economic Forum, up to 10% of the global Gross Domestic Product globally will be facilitated via blockchain technology by 2025.

Ethereum can support not only individuals but businesses around the world by providing improved interconnectivity. This technology can foster innovations, such as crypto-collectables (such as NFTs - non-fungible tokens), blockchain-based healthcare records, sustainable energy sharing, and so on and on.

Because Ethereum is decentralised, it’s believed Ethereum can also help people target censorship and run uncensorable dApps to keep societies informed.

On top of that, Ethereum’s cryptocurrency’s Ether is one of the cryptocurrencies rising in popularity. The great news is that, unlike Bitcoin, Ethereum is uncapped (more on this in a bit!). There are around 115,449,504 Ether in circulation at the time of writing and this number is increasing.

Here we should note that programmers are also compensated in Ether coins to run the protocol on their computers and help the network remain safe and effective.

Last but not least, diversification matters in the world of trading, which is enough of a reason to invest in Ethereum.

After all, Ethereum is not only a cryptocurrency but an innovative platform for smart contracts, tokens, and decentralised apps.

Should I Invest in Bitcoin or Ethereum? Will Ethereum ever overtake Bitcoin?

Ethereum is the second-largest currency after Bitcoin, and as explained above, there are many reasons to invest in Ethereum instead of Bitcoin. Though both Ethereum and Bitcoin use distributed ledgers and tokens, Ethereum has some advantages over Bitcoin, which attracts traders from all over the globe.

As mentioned above, there are more tokens in circulation than Bitcoin, and it’s easier to obtain ether at a shorter block time. To be more precise, it takes up to 15 seconds to receive ether in a transaction, compared to Bitcoin transactions that can take between 10 minutes and a day.

Because Ethereum has its own programming language, Solidity, it is used not only as a currency and transactions but as a way to run decentralised applications, monetise work, and delegate ownership.

Its unique structure to run smart contracts is actually one of the most important aspects that make Ethereum a good investment option.

A clear example of the importance of Ethereum is the innovative Ethereum Blockchain as a Service, presented by Microsoft Azure and ConsenSys. It allows for financial services customers and developers to have a flexible and safe cloud-based blockchain environment.

Interestingly enough, many crypto games are also based on Ethereum, which makes them an attractive investment option. One of the most popular games is CryptoKitties that allows gamers to breed and trade digital cats.

Will Ethereum get as high as Bitcoin?

Probably not in the foreseeable future, but it could one day be possible.

Ethereum and Bitcoin are the two most popular cryptocurrencies. Together they dominate the crypto market.

But still, Bitcoin is far ahead of Ethereum. According to TradingView, Bitcoin makes up approximately 55.7% of the total cryptocurrency market’s market cap.

Meanwhile, coming second is Ethereum at approximately 12.21%. The gap between the two is enormous.

Looking at CoinMarketCap we can see more clearly how much more Ethereum would likely have to grow in terms of market capitalisation to reach a similar valuation.

At the time of writing, Ethereum has a market capitalisation of $254,787,981,112 (over $250 billion), while Bitcoin is at $1,169,654,666,795 (over $1.1 trillion). For Ethereum to reach Bitcoin’s prices, it would have to more than quadruple in value, which will not happen overnight!

A big change in people’s perception of cryptocurrency would have to take place for Ethereum to reach Bitcoin.

While Ethereum has been called the next trillion-dollar cryptocurrency and offers a wide range of features not available to Bitcoin, Bitcoin is far simpler to understand.

Bitcoin solely aims to become digital money. Ethereum’s goals are much larger and get lost on less technical people.

Further to that, we need to recognise that most crypto traders are not really interested in dApps and smart contracts. What likely interests them is profit, and predictions that suggest Bitcoin can overtake the market cap of gold will keep them hooked on Bitcoin for the foreseeable future.

Bitcoin is more feasible to understand. It’s harder to explain to people why we need Ethereum in comparison to Bitcoin.

Therefore, while Ethereum will likely continue to climb in value, expecting it to reach BTC levels might be too much for the time being.

Don’t Miss: Bitcoin vs. Ethereum: Which One Should You Buy?

How Much Could Ethereum be Worth?

Given that Ether’s main purpose is not to become an alternative to global currencies but to facilitate smart contracts and applications, many experts see a huge potential in Ethereum. Some analysts predict that an ETH token may reach $10,000 and over a trillion-dollar market cap. However, when such predictions could materialise is difficult to say.

Though making crypto predictions is hard, the demand for decentralised finance makes experts believe that Ethereum might rise again. Based on price projections and Fibonacci extensions, Ethereum experts claim it may reach extreme highs in the next five years.

For instance, some predictions suggest that between 2023 and 2025 Ethereum’s potential high might be $50,000 (more on this below!), while its potential low might be $3,500. As a result, many crypto traders may take advantage of such price swings.

Let’s look at some other predictions right now.

What will Ethereum be worth in 2022?

Price predictions for Ethereum in 2022 are positive. WalletInvestor is very bullish, believing that in 2022 Ethereum could reach $3,144.51. But Digitalcoin is far more optimistic, forecasting that Ethereum could reach $4,076.70 in 2022.

And then there is The Economy Forecast Agency, which has made some of the wildest predictions so far (they might like Ethereum a little too much!). 

They predict that Ethereum will start the year at a low of $5,805 but could end up reaching as high as $9,086 in December 2022. But that’s not all, they also believe Ether could reach a new all-time high of $11,196 by August or September.

And finally, there’s Trading Beasts who are much more conservative with the prediction methods. They predict that Ethereum will be worth $3,283.896 at the highest in 2022, which feels as if it could be the most reasonable forecast.

How much is Ethereum worth in 2025?

The further we get from today’s date, the harder it becomes to find reasonable predictions for how much Ethereum could be worth in 2025. Again, however, 2025 predictions are generally very bullish. 

Digitalcoin’s Ethereum forecast for 2025 is a bold $7,053.95, a humongous increase from its price today!

At the time of writing, The Economy Forecast Agency only provides predictions for 2025 up till May.

However, they are loosely similar to Digitalcoin, predicting a high of $6,650 by May 2025. While a little lower it is still a huge rise. And last but not least, WalletInvestor’s 5-year forecast - which would technically be for 2026 - predicts Ethereum to reach $7,168.52.

What will Ethereum be worth in 2030?

The lowest prediction for Ethereum is by Anisa Batabyal of Coinswitch who believes it could reach $5,000 by 2030. On the other end of the spectrum, we have Coin Price Forecast, which predicts that by 2030, Ethereum may be worth between $39,690 and $42,884 in 2025.

But this is still minuscule in comparison to the prediction made by Brian Schuster of Ark Capital LLC, who in 2020 stated he believes Ether could reach $100,000 in 10 years, according to Blockgeeks.

Can Ethereum reach $10,000?

Coin Price Forecast and Brian Schuster mentioned above certainly think so! 

Cryptocurrency Price Prediction forecasts that Ether could be valued at $9,374 by February 2025, and will then jump to $36,119 by March 2025 (no reason is given for the sudden leap in price).

While to some it may seem a little outrageous to make such predictions at this time, you need to bear in mind how much Ethereum’s price has already grown since the beginning of the year - it has more than tripled in price!

Can Ethereum reach $50K?

Coin Price Forecast believes that Ethereum will be very close to $50,000 per coin by 2031, predicting that it could be worth $49,549, but also predicts that the following year, 2032, it could decrease slightly to $48,622.

Cryptocurrency Price Prediction is far bolder in its predictions. They forecast that Ethereum will launch right past $50,000 and reach $72,735 by February 2030.

Will Ethereum go down in 2021?

There will likely be unavoidable dips in Ethereum’s price here and there throughout the year, but generally speaking, many believe the price of Ethereum will continue to go up in 2021.

Traders should also remember that just because Ethereum doesn’t always maintain new highs, doesn’t mean it will continue to go down!

You need to look at it from a more long-term perspective - from the beginning to the end of the year for example. The dips here and there will likely be insignificant in comparison to the bigger picture.

Who Should Include Ethereum In Their Portfolios?

  1. Day traders: Ethereum has been known to have multiple-percentage swings in one day, making it a good option for day traders who believe they know what its short-term movements will be.
  2. Cryptocurrency traders: Ethereum is the second well-known cryptocurrency, and therefore, many crypto traders buy it as part of their cryptocurrency portfolio.
  3. Blockchain enthusiasts: Since Ethereum is the second major application of blockchain technology, those who have faith in the technology and its potential impact on the tech and financial industries, could consider buying ethereum.
  4. Forex traders: The cryptocurrency market is perceived by some as a safe-haven for when traditional currencies become too volatile. Since Ethererum is more separated from mainstream markets than other crypto, it could become the new gold safe-haven for some traders.

But is 2021 too late to buy Ethereum?

No, it is absolutely not too late to buy Ethereum. Many crypto market analysts appear to be quite bullish on Ethereum and there is a general consensus that it will likely increase a lot in value in the near future.

That said, there isn’t a clear consensus on how high Ethereum can reach.

If that is the case, then buying now could be ideal and you could even call it ‘cheap’.

Is Investing In Ethereum Risky? Could Ethereum be a bad investment?

investing in ethereum

Does Ethereum have a future?

Yes, Ethereum does have a future. If anything, it is still only just getting on its feet as smart contracts, dApps and DeFi services grow in popularity.

There is no urgent reason to suggest that Ethereum will not last for the next 10 or so years.

That said, there are technical risks that are worth mentioning. The biggest is that Ethereum has an inflationary nature as it doesn’t have a cap on the total number of tokens that can be made.

What this means is that if a large number of Ether tokens were dumped into the market, it would decrease the value of everyone’s holdings.

Another key technical risk is Ethereum’s 2.0 upgrade to proof of stake. While this would likely make Ethereum even more popular, it is a significant change and if it doesn’t work out, it could be catastrophic to Ether’s price.

And finally, we need to consider Ethereum’s rivals (check ‘Alternatives to Ethereum’ below for more!).

Ethereum was announced in 2015 and back then the idea of smart contracts and dApps was brand new.

Fast forward to today, there are a lot of new cryptos promising to topple Ethereum in what it claims to achieve.

How safe is Ethereum?

Ethereum is largely considered safe. Like almost all cryptocurrencies, Ethereum uses blockchain technology to ensure itself against attackers.

As Ethereum’s network continues to grow, it will become more secure as having more nodes makes it harder for attackers to manipulate it. This is because the combined computing power of all the nodes on the network will be very hard for attackers to overcome.

However, we cannot avoid not talking about the creation of Ethereum Classic

In 2016, the network was attacked, and many Ether tokens were stolen. The Ethereum team hard forked the blockchain two create another chain where the hack had not taken place.

Ethereum Classic is technically the original version of Ethereum and what we technically call Ethereum is the newer version. It is worth mentioning that not everyone wanted to migrate to the new version and that’s how we ended up with two Ethereums.

However, it is unlikely that such an event will happen again as the network is more secure now.

Note that many of the hacks where Ether has been stolen did not happen on the Ethereum blockchain, but in cryptocurrency exchanges where tokens are stored in ‘hot wallets’.

To keep your Ethereum safe, store it in your own wallet, not on a cryptocurrency exchange!

How legit is Ethereum?

Despite the promises that Ethereum shows and the support of the crypto development world, it’s not a secret there is a lot of pressure from regulators and banks regarding crypto trading.

In fact, it’s the regulatory pressure around the so-called initial coin offerings that can make any cryptocurrency drop significantly.

Another obstacle is the fact that blockchain technology may be difficult to understand for people who are not traders or developers. Some may fall victim to crypto scams as well. 

That’s why proper crypto trading education is essential to help you understand what Ethereum is and how to invest in Ethereum successfully. 

An online course is a wonderful opportunity to understand the basics of crypto trading, find a reputable broker, and establish a successful trading strategy.

Alternatives to Ethereum

If all the risks have you spooked, don’t worry there are many alternatives you can also look into. Even if you’re certain you want to trade Ethereum, you should also know these alternatives well.

Some of Ethereum’s biggest rivals today include Polkadot (DOT), Cardano (ADA), Binance Coin (BNB) and EOS (EOS), and Tron (TRX).

Unfortunately, while Ethereum introduced smart contracts, dApps, DeFi to the cryptocurrency community, there is always the threat that any of the above may outmanoeuvre Ethereum.

These coins could also make good hedges against Ethereum if you are looking to reduce your risk.

Conclusion: Is Ethereum a Good Investment?

Yes, investing in Ethereum is worth considering. For many, investing in Ethereum has proven to be a great decision.

In 2017, the price of one Ether token was $25, and by April 2021 it had reached $2,250. In four years, the value of ETH had gone up 80 times!

So, if you had invested $1,000 into Ethereum back in 2017, by April of 2021 you would have had about $80,000 in Ethereum!

So is Ethereum a good investment? Right now, Ethereum is definitely considered a good investment. And, if you are looking to invest in it, now would probably be a good time to do so.

While no investment is risk-free, investing in Ethereum has generated more than 8,000% return over the last few years. Whether you’re new to Ethereum investing or just curious about how to make the most of your investment, understanding what to know before investing in Ethereum is critical. 

The below prediction figures outline some of the Potential high and low of Ethereum price forecasts in 2021, 2022, 2023, 2024, and 2025 offered by technical analysts and industry experts.

Year High Low
2021 $4,400 $1,100
2022 $6,300 $1,655
2023 $10,200 $2,200
2024 $15,150 $2,865
2025 $25,500 $3,560

 

In the end, the final decision comes down to you. What kind of investor do you want to be? Figure out the answer to that question, you’ll definitely know if Ethereum is a good investment!

If you're feeling inspired to start investing in Ethereum, you may be pleased to know that etoro provides the ability to trade with Crypto assets and CFDs on up to 90+ cryptocurrencies. 

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Key points

If you remember anything from Is Ethereum A Good Investment And Should I Invest in ETH? Make it these key points.

  • Ethereum is predicted to be the next trillion-dollar cryptocurrency. It benefits from a growing dApp and DeFi ecosystem. 
  • While Ethereum will likely not overtake Bitcoin it is still an excellent investment opportunity. Ethereum has much larger goals than Bitcoin, it is a different kind of investment.
  • It isn’t too late to buy Ethereum. Ethereum is predicted to rise exponentially in price, and so it is still early to invest.
  • There are many ways to invest in Ethereum, but we recommend eToro. Setting up an account is easier and more secure than if you used a cryptocurrency exchange.

How to invest in Ethereum?

There are several different ways in which you can invest in Ethereum. The two most popular include buying and selling as a CFD via a broker, such as eToro above, or buying and selling via a cryptocurrency exchange.

Do note that trading Ethereum through a broker is largely considered a safer option as cryptocurrency exchanges are known to get hacked and using a digital wallet can be complicated.

More recently, the CME began offering Ethereum futures and other methods of investing in Ethereum are likely to be introduced as it increases in popularity.

You could also invest in managed accounts, but you will lose control over when you can buy and sell Ethereum and the individual(s) trading on your behalf will take a slice of the profit too.

When should I sell my Ethereum?

This depends on what kind of trader you want to be - a day trader or a swing trader - and what you consider a good profit.

According to CoinMarketCap, at the time of writing, the 24-hour low of Ethereum is $2,045.39 and the high is $2,102.87. Traders could aim to buy at the low point and sell at the high point, for example.

Whatever you decide to do, it is important to stick to your goals. For many trend traders, the best time to sell is when the price has peaked and appears to have started to decline. (Make sure you understand how the market runs in cycles!)

Can you cash out Ethereum?

Yes, you can always cash out your Ethereum. If you own Ether tokens in a crypto wallet, you can move them to an exchange and exchange them for your currency of choice.

Or, if you have invested in Ethereum via a broker, you can simply just sell it.

There should not be any reason why you should not be able to cash out your Ethereum.

FAQs

Here are some of the most frequently asked questions on Ethereum. Hopefully, they’ll help you with any other questions you may still have.

How can I get free ETH?

In most cases, you will not be able to get Ether for free. In most cases where Ether is offered for free, it will likely be too much effort for too little Ether.

There are many ways advertised online where you can get Ether for free but note that many of these methods involve you having to do something, such as participate in surveys or play games (might not be as fun as it sounds!).

You can also explore the possibility of making Ether from persuading people to websites with affiliate links. But none of this is of course for ‘free’ as while you might not be paying for it, you are working for it!

Furthermore, you should also question if you trust such sites - many are likely scams.

Can Ethereum make you rich?

Ethereum could make you rich, depending on the amount you invest and your timing. If it does continue to increase in price over the coming months and years, buying and holding now for the long-term could be profitable.

Do note though that Ethereum is not a get rich scheme and you should not plan on getting rich from trading it.

Is Ethereum a pyramid scheme?

No, Ethereum is not a pyramid scheme. The Ethereum blockchain is decentralised and runs on thousands of nodes across the world. Its decentralised nature means there is no central point of control.

Ethereum is developed by the Ethereum Foundation, Hyperledger, Nethermind, OpenEthereum, and EthereumJS.

Is it better to buy Bitcoin or Ethereum?

Both Ethereum and Bitcoin are expected to tremendously increase in value, so both coins offer very high chances of providing excellent returns. Perhaps for the time being though, Bitcoin may be a slightly better investment option as it is very popular. That said, it may be even wiser to invest in both Ethereum and Bitcoin.

How long will Ethereum last?

Ethereum will last as long as people use it, theoretically. As the Ethereum network is distributed around the world, it will continue to operate until the last node logs off.

Perhaps the biggest threat to Ethereum’s existence is the rise of quantum computing. Quantum computers can perform an extraordinary number of calculations.

Is ETH mining still profitable?

According to Gareth Jenkinson writing for Cointelegraph, yes, mining Ethereum is still very profitable. In fact, because of the rise of DeFi services on the Ethereum blockchain, they may be doing even better than ever!

However, Ethereum mining profitability may soon sharply decline once EIP-1559 is implemented and even more so when Ethereum finally switches to proof of stake. So, the clock is ticking for ETH miners.

How much Ethereum is left to mine?

There is no limit on the amount of Ether that can exist. Ethereum is one of few cryptocurrencies where no cap has been set. Though there has been some discussion on this, it seems unlikely at the time being that there ever will be.

Further Reading:

Pros and Cons of Investing in Ethereum

Ethereum Dominates Crypto With ERC-20 Tokens: Here’s How

A Beginner’s Guide To Stablecoins

Most Popular Cryptocurrencies In The UK

Top 10 Cryptocurrencies To Invest In 2021

Most Popular Cryptocurrencies In The USA

If you liked our article Is Ethereum A Good Investment And Should I Invest in ETH?, please share it with anyone who might be interested in Ethereum. 

Disclaimer: Cryptocurrencies are highly volatile. Your capital is at risk and Past performance is not an indication of future results.

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