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Pros and Cons of Investing in Ethereum, Will It Be a Millionaire Maker?

Last Updated November 10th 2020

Advantages and Disadvantages of Investing in Ethereum

Pros and Cons of Investing in Ethereum, Is it Good to Invest in Ethereum? 

Learn more about the pros and cons of investing in Ethereum pushing you ahead to know if it is a good idea to invest in Ethereum.

Ethereum just might be the missing piece in your investment portfolio. Here’s why you might consider investing in Ethereum, the pros and cons, and what exactly to look for.

The cryptocurrency sector keeps expanding at a rapid pace, even faster than the universe. Therefore, we at Trading Education provide a wide range of educational articles and comprehensive trading courses that can help investors develop valuable skills and a positive financial mindset.

Before investing in Ethereum, it’s vital that you understand what it is that you’re getting into. Ethereum is not just another form of currency, like Litecoin or Bitcoin. Ethereum isn't your average cryptocurrency. Instead, it offers something entirely different from every other type of digital or cryptocurrency. And while this presents a solid investment opportunity, it's vital that you understand what Ethereum is, what it does, and any potential red flags to look out for as a speculator.

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So, keep on reading to find out if the advantages of investing in Ethereum outweigh its disadvantages and decide for yourself if Ethereum is a good investment.

What Is Ethereum?

Before we explore the benefits and drawbacks of investing in Ethereum, it’s only fair to talk about Ethereum and its place in the cryptocurrency industry where thousands of digital assets are fighting for dominance.

Ethereum is an innovative open-source blockchain technology that can support not only financial transactions but smart contracts and decentralised applications (dApps). 

Its native currency ether is the second-largest cryptocurrency by market cap at the time of writing.

If you are a newbie, you may ask what open-source blockchain technology is - sometimes an overused phrase left without any clarification. Blockchain, also referred to as Distributed Ledger Technology (DLT), is a  decentralised platform (run by different computers across the world) that stores blocks of information in order to make transactions and stored data transparent. Open-source simply means that the platform is accessible, so anyone from any corner in the world can track data.

Have you considered investing in Ethereum?

Ethereum is also valued by numerous crypto enthusiasts as the platform supports different tokens, including BAT - one of the most popular coins in the world of digital advertising and content creation.

Because of its tech potential, investing in Ethereum is a popular financial venture, both in the short- and long-term.

So to help you make an informed decision about your next market move, here are the pros and cons of investing in Ethereum.

The Pros of Investing in Ethereum

pros of investing in ethereum

 

What are the benefits of investing in Ethereum?

Lots of Ethereum-analysts and speculators think Ethereum has a big future, making it an attractive option for new and established crypto traders. So here's a quick look at the pros of investing in Ethereum.

✅ Well-known founder and an expanding developer community:

Launched in 2015, Ethereum has managed to revolutionise the cryptocurrency investing scene pretty quickly. Though Ethereum is not the first cryptocurrency, ETH has become one of the most popular digital assets. The team behind Ethereum - particularly, young Vitalik Buterin - is loved by many.

Simply because they’ve managed to set a clear and transparent roadmap! One of the main goals this year, for instance, is to focus on proof-of-stake and launch Ethereum 2.0. Ethereum’s developer ecosystem is also expanding, with more than 250,000 active developers, as per Consensys. Such strong support is definitely an advantage when it comes to Ethereum investing.

✅ Ethereum is decentralised:

Perhaps one of the main pros of Ethereum investing is its decentralised structure. As stated above, blockchain technology is decentralised and transparent, initially created to offer an alternative to traditional banking systems. One curious fact about Ethereum is that there’s no over-concentration of users, with 15,7911 nodes spread across the globe. As Ethereum allows people to execute deals and transactions without central banks or third parties, this can also help users deal with restrictive regulations, unfair transaction fees, and even censorship worldwide.

✅ Ethereum is more than a cryptocurrency:

Talking about advantages, we should emphasise the fact that Ethereum is more than a cryptocurrency. The platform supports smart contracts, dApps (or apps that exist on a blockchain), and numerous Decentralised Finance (DeFi) projects, which is one of the main advantages of investing in Ethereum. As such, Ethereum can be used in different sectors (for example, gaming, medicine, and energy distribution); it can foster the tokenization of art, patents, voting history, medical records, ID verification, crypto-collectibles, and other complex agreements.

✅ Ethereum is attracting more businesses:

Many big companies support the development of Ethereum, with Ethereum Enterprise Alliance being one of the leading organizations monitoring Ethereum. As the need for third parties is eliminated, more and more investors get into Ethereum investing. One of the main figures interested in Ethereum, for instance, is the financial guru Andreessen Horowitz. Besides, another pro of investing in Ethereum is the fact that Ethereum facilitates numerous Initial Coin offerings (ICOs). ERC-20 tokens are often seen as the standard for fundraising and ICOs. Talking about that, it’s not a secret that Crypto Kitties - with the opportunity to improve digital ownership - took the world by storm and reached a funding amount of 12 million dollars, as per Tech Crunch.

✅ Ether is not capped:

Unlike Bitcoin, ether (ETH) is not capped and has practical utility. Transactions come with self-executing contracts and fast transaction times. Interestingly, once Vitalik said that Ethereum will be able to process over one million transactions per second soon. Isn’t that a great advantage to invest in Ethereum?

Ready to dive into Ethereum market?

The Cons of Investing in Ethereum

cons of investing in ethereum

Though the pros of investing in Ethereum are more than alluring, there are certain cons that investors should be aware of. Like any investment, putting your money into Ethereum isn't risk-free. So here's what you should know about the risks of investing in Ethereum.

❌ Ethereum is struggled with scaling:

Unlike Bitcoin that has one single function, Ethereum acts as a ledger, a platform for smart contracts, and so on and on, which can lead to bugs, breakdowns, and hacks. While its multifunctionality may be an attractive feature, some investors are simply wary of investing in ETH. On top of that, Ethereum still has to deal with scaling and network congestion issues in order to attract more cryptocurrency investors.

❌ Ethereum uses a complicated programming language:

While Ethereum is Turing complete and uses a programming language similar to C++, Python, and Java, Ethereum’s own language Solidity can be pretty tricky to learn. One of the main problems is that it’s not easy to find beginner-friendly tutorials. Here we should note that Solidity is not only a programming language; it also generates machine-level codes and acts as a compiler for the Ethereum Virtual Machine.

❌ Ether is more like gas:

Unlike Bitcoin, often considered crypto gold, some claim that ether is more like gas used to run smart contracts. As we know, gas fees describe the costs needed to execute a transaction. Such underestimations might be a big con for some cryptocurrency investors.

❌ Investing in Ethereum can be risky:

Just like any other cryptocurrency, investing in Ethereum can be risky. Cryptocurrencies are highly volatile, which can increase profits but also multiple losses. Ether’s prices have gone through many ups and downs in the past, which can be a big drawback for some investors, especially beginners. In addition, Ethereum’s fees are also fluctuating, which is also problematic. 

Is Ethereum a Good Investment and Should you Invest in Ethereum?

With different pros and cons, you may ask if Ethereum is a good investment and should I invest in it. 

ethereum price chart

Most investments come down to the risk vs reward factor. In other words, do the potential rewards of investing in Ethereum outweigh the possible consequences of the risks?

No surprise that thanks to its innovative technology and huge market cap, Ethereum keeps attracting big businesses. On top of that, as Ethereum is more affordable than bitcoin.

In the end, though the pros of investing in Ethereum is outweighed its cons. In other words, the benefits of Ethereum far outweigh its risks.

Put simply, Ethereum is low-risk investment with lots of potential rewards. It’s something you should definitely do some research before you consider adding Ethereum to your portfolio.

The real Ethereum investing question then, does it really work? If you’re willing to invest the time and energy, then for you, it could well do.

Though Ethereum investing can be risky - with tons of competitors out there - the truth is that Ethereum has revolutionised the cryptocurrency market and is a great way to diversify your portfolio.

If you are willing to learn how to trade cryptocurrency and master the art of cryptocurrency trading psychology, then Ethereum investing might be the right choice for you.

The final decision is down to you. You are the only one to decide whether you should invest in Ethereum or not

How Much to Invest in Ethereum?

If you think that the pros of investing in Ethereum are alluring, you may also ask “How much to invest in Ethereum?”

One of the main rules in the investment world is to invest only money you can afford to lose.

The good news is that today, cryptocurrency investing is highly accessible. One can start trading with as little as $100 and invest in just a fraction of Ethereum.

With eToro, for instance, you can easily buy and sell ETH and trade CFDs of over 90 cryptocurrency pairs.

Will Ethereum Be a Millionaire Maker? | Conclusion

investing in ethereum

You might want to know if Ethereum will be a millionaire maker.

it already is – Ethereum has a market cap of above $50 billion at the time of writing.

The value of Ethereum is likely to increase further, as scarcity tends to promote growth in price. While making Ethereum price predictions is speculative due to the high volatility levels in the cryptocurrency market, we can simply try to analyse the factors that affect Ethereum investing.

Two of the main factors that influence cryptocurrency investing is demand and supply and market sentiment. When it comes to Ethereum, many consider it the number one altcoin ever. Sentiment has been fueled by growing tech innovations and projects. With millions of ether in DeFi apps, the demand for Ethereum might also keep increasing. The release of Ethereum 2.0, for instance, may attract new investors and lead to high demand.

And guess what! Experts are positive about its future. Guru Simon Dedic, for instance, claims that Ethereum could reach $9,000 per coin. 

While we can’t turn back time and buy ETH in its token sale to make a fortune, with enough training, investing in Ethereum can potentially become a profitable investment over time.

Please remember, any investment includes some risk. So only invest what you can afford and do as much research as possible before making a final decision

Now you know the pros and cons of investing in Ethereum. If you’re feeling inspired enough to start investing in ETH, or if this article has provided some extra insight to your existing trading knowledge, 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

  • Ethereum is one of the most popular investment options in the financial sector. It ranks second by market cap, just after Bitcoin.
  • One of the main pros of Ethereum is its innovative technology that supports smart contracts, DeFi apps, and a variety of tokens. 
  • Ethereum can be used in different sectors far beyond finance, including medicine, voting, and gaming.
  • While we can’t deny the fact that Ethereum has revolutionised the world, it still has a long way to go. One of the main events that crypto enthusiasts and investors are anticipating this year is the launch of Ethereum 2.0 that will focus on proof-of-stake.
  • Even though nobody can predict the future of Ethereum and guarantee that Ethereum will be a a good investment, many financial experts are positive about its growth.

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

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