Is Now the Right Time to Buy Ethereum?

The number two crypto has made a solid recovery from June lows

Last Updated January 7th 2022
4 Min Read

The answer to the question: 'Is now a good time to buy Ethereum?’ will likely depend on Ethereum price prediction updates. As per ETH price forecasts, the price of Ethereum is predicted to cross the $5000 mark in 2022, soaring towards the $7,000 level in 2023 and $15,000 in 2025.

Key points of why now is the right time to buy Ethereum:

  • The transition to Ethereum 2.0 is almost complete.
  • Institutional money wants Ethereum.
  • Ethereum has been proven over time.
  • Ethereum has a scarcity aspect to it.

The crypto market is one of the best-performing asset classes this year. Platform blockchains have particularly had a good year due to the surging interest in DeFi.

Ethereum (ETH), for instance, rallied from around $100 in early 2020 to highs of $4800 in November 2021. It has also rebounded from the recent pullback and is now gaining in price again.

But with the crypto now holding steady above $3000, is now the time to buy Ethereum? This analyzes dives deep into Ethereum to figure it out.

Ethereum Is In A Transition

Ethereum is in a transition to Ethereum 2.0. The transition is a complete transformation, including a change in the consensus mechanism.

Ethereum is shifting from Proof-of-Work to Proof-of-Stake, which will drastically cut the carbon footprint of this blockchain.

The transition also includes the scaling of this blockchain through Optimism and other layer-two solutions. Another change that has already been implemented is reigning in on gas prices by making them more predictable.

This transition is a big deal for a couple of reasons. Firstly, the issue of the environment has become a sharp point of criticism for blockchain projects.

By overcoming this problem, Ethereum is likely to draw in more investments from environmentally-conscious investors, and there are many of them in the developed world.

Then there is the fact that with the scalability issue behind it, Ethereum will draw in more Dapps developers than ever before.

To understand how big of a deal Ethereum scaling is, it has been the basis of competition for many projects that are hoping to dethrone Ethereum.

Nonetheless, Ethereum has maintained its dominance as the top platform blockchain in the market.

Therefore, Ethereum has what it takes to increase its dominance by many multiples from its current position by overcoming these issues.

This could in turn add to its intrinsic value by a huge margin, and the same could reflect in its price.

Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Lots Of Institutional Adoption For Ethereum

Institutional money was a major factor in the growth of the crypto market in 2021 and is expected to play a vital role in this market for many years to come.

However, the flow of institutional money is not evenly distributed across the market. A lot of it has largely been flowing into Bitcoin and Ethereum.

A lot of Ethereum financial products targeting institutional money have come up over the past year.

For instance, VanECK filed for an Ethereum ETF in the US, and its approval seems likely since the Bitcoin ETF got approved in October last year. This points to the growing appetite for Ethereum amongst institutional investors.

Considering that institutions have hundreds of billions of dollars that can be invested in crypto, it goes without saying that this will have a significant impact on the value of Ethereum going into the future.

Ethereum Is Tested And Proven

Lots of time, Ethereum competitors ride on the fact that it has scalability issues. However, what is never mentioned is that these issues come up because there is actual usage going on in the Ethereum ecosystem.

Ethereum has been operating at full capacity for years, and if most of its competitors were stretched to the same limits, flaws would emerge too.

This explains why lots of top Dapps, especially in DeFi continue to choose Ethereum. They know that Ethereum limits are well-known, predictable, and something is being done to solve them.

Essentially, there is an element of predictability and security in Ethereum that will keep drawing developers towards it in the long run.

With DeFi expected to become a trillion-dollar market in the future, the intrinsic value of the Ethereum blockchain can only go up going ahead.

Check out: Is Ethereum a Good Buy?

Ethereum Is Scarce

Coin supply is one of the most important factors to the value appreciation of any cryptocurrency.

If there is too much of it in the market, then the laws of demand and supply dictate that it can’t gain value much.

The element of scarcity is the reason why Bitcoin is where it is today. Ethereum is pretty scarce too.

While there is no hard cap to Ethereum’s supply, the difficulty of bringing new Ethereum to the market has been going up over the years.

The concept of scarcity on Ethereum will become even more pronounced with Ethereum 2.0.

That’s because, with the London fork, Ethereum introduced a coin burn feature. This means that going forward, the demand for Ethereum, especially in DeFi, will keep outpacing its supply.

This is a factor that could see its value rally significantly in the future as its adoption grows.

It could be a good move for investors who believe in this project to buy Ethereum now, with the next 5 to 10 years in mind. However, it is essential to remember that cryptocurrencies are still in their infancy and highly volatile. 

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Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.

Read More:

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