Is It Too Late To Buy Ethereum?

Last Updated August 16th 2021
4 Min Read

It is not too late to buy Ethereum.

Ethereum Is In Transition

Ethereum (ETH) may be trading at $3000, just $1k shy of its all-time highs. However, when put in the context of its upcoming events, it is just getting started.

On the 5th of August, Ethereum did a protocol upgrade that was dubbed the London Fork.

This made gas prices more predictable and also introduced a coin burn feature.

This is just part of the transition that Ethereum is making towards Ethereum 2.0, which spells a lot of good tidings for this crypto.

For starters, it will make Ethereum more scalable. Ethereum has been operating at maximum capacity for years, making it almost impossible for some applications to run on it. CryptoKitties is a good example.

However, this is about to change going forward. With Ethereum 2.0, scalability will no longer be a problem, and Ethereum will be able to handle any applications without lags to the system.

This opens lots of opportunities, especially in the DeFi space. Ethereum already controls more than 90% of the DeFi ecosystem.

Once scalability is no longer a problem, Ethereum will most likely take an even more significant share of this market, and it’s a big deal.

It’s a big deal in the sense that expert projections point to DeFi becoming a trillion-dollar market.

This could easily push Ethereum into the 10s of thousands of dollars a coin, making current prices pretty early for Ethereum investors.

The most significant aspect of the London fork that relates to Ethereum usage is the coin burn feature.

This is part of making gas prices more predictable, and Ethereum is a more affordable blockchain to use.

Ideally, this means that as Ethereum’s demand in the DeFi ecosystem grows, this demand will be chasing a reducing supply of coins.

This deflationary element to Ethereum, coupled with rising demand, could see its value increase by multiple times going into the future.  

Ethereum Investment Products Are On The Rise

Crypto investment products have been are on the rise for some years now. However, for a long time, they have been focused on Bitcoin.

Recently, the number of Ethereum investment products has been on the rise. A while back, VanECK announced that it had filed for an Ethereum ETF with the SEC. Goldman Sachs also said that it was looking to open an Ethereum trading desk.

Outside of the US, multiple Ethereum products are available in the market, and many more are coming up. So why is this a big deal for Ethereum?

Well, most institutional players looking for exposure to the crypto market have been doing so through derivatives. The idea is to avoid the complexities that come with cryptos, such as custody and regulations.

Given that institutional money is increasingly vital to crypto growth, these Ethereum products will impact its long-term growth. It’s one of the factors that will have an impact on its growth in the long run.

With the potential for institutional money to inject billions of dollars into crypto, such investment products place Ethereum at the same level as Bitcoin in terms of potential for adoption.

This gives Ethereum a huge potential for growth going into the future. It’s one of the indicators that Ethereum is still in its early days. The amount of institutional money in crypto is still negligible but it’s growing. As it increases, so will the value of Ethereum now that there are tons of investment products that can draw institutional money to it.

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Ethereum Still Follows Bitcoin

Bitcoin is still the king of crypto, and whenever it moves, the entire crypto market moves with it.

This is quite evident in its price over 4 months. In May, Bitcoin (BTC) tanked due to China’s crackdown on mining. While these were Bitcoin-specific news and had little to do with other cryptocurrencies.

However, they tanked along with it. They have rebound with it too, all through July and August.

While this may have its downsides for the market, it is good for the long term value appreciation of Ethereum.

That’s because, with Bitcoin’s growing adoption, especially by institutional players, its value is set to go up. The confidence in Bitcoin is so high that one of the richest men in Mexico said that given a chance only to own one asset for the next 30-years, he would choose Bitcoin.

Others like Cathy, of Ark Invest, believe Bitcoin has the potential to hit upwards of $500k a coin.

If history is anything to go by, if Bitcoin hits any price above $150k, Ethereum could easily trade at prices above $15k.

That’s a huge increase from its current price, and anyone who buys Ethereum now would make a tidy profit off it.

All of the above factors point to Ethereum as highly undervalued despite trading at over $3000.

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