Should I Buy Ethereum In 2022? Pros And Cons Of Ethereum Investment

Last Updated October 27th 2022
12 Min Read

The cryptocurrency market continues the bearish trend that started earlier in the year. Without much big news, it is only natural to wonder, is Ethereum a good cryptocurrency to buy now?

This is a legit question, given that the world economy is expected to enter a recession in 2023. There is also talk of the Federal Reserve raising interest rates by up to 100 basis points. 

With this in mind, is Ethereum worth buying now?

Let’s do an in-depth analysis of Ethereum to figure this out. 

A Closer Look At Ethereum

8 Reasons Why Ethereum Is A Good Cryptocurrency To Buy Now

Ethereum is the largest and one of the oldest altcoins in the market today. Since it launched in 2015, Ethereum has given investors a pretty high return, up to 55,300%. 

That said, the market dynamics are ever-changing, and how the market was between 2015 and 2017 is slightly different from what it is today. At that time, retail money was the key market driver. Today, institutional money is taking an even more significant role in the market, and there are many regulations.

With all these changes, it is pretty natural to wonder, is Ethereum a good investment today?

To answer this question objectively, let’s take an in-depth look at the advantages and downsides of buying Ethereum. For a start, below are 8 reasons why Ethereum is a worthy cryptocurrency to invest in now.

1. Ethereum Has Real-World Usage 

There are a lot of cryptocurrencies that have no real usage besides speculative trading. In fact, a huge chunk of altcoins falls under this category. Ethereum is one of the top cryptocurrencies that have a high utility.  

Ethereum use cases span from DeFi to NFTs. For context, all the best DeFi cryptocurrencies in the market today are Ethereum-based. Similarly, all top NFT cryptocurrencies like ApeCoin, Decentraland, and Axie Infinity are based on Ethereum.

Ethereum’s dominance in various cryptocurrency use cases has two advantages. The first one is that the demand for Ether tokens will grow going into the future. Secondly, investors seeking a mix of value growth and some element of stability will increasingly see Ethereum as a smart cryptocurrency investment. 

The result could be an upsurge in the value of Ethereum once broader market factors become favourable to the cryptocurrency market. 

If you are optimistic that these use cases could play a role in Ethereum’s value growth, then the next thing to consider is where to buy Ethereum safely. 

Below are some of the best exchanges to buy Ethereum

  • Coinbase
  • Huobi Global
  • Binance
  • eToro

buy ethereum

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

2. Ethereum Is Becoming Environmentally Friendly 

Environmental issues have become a major concern for investors across all markets. That’s because the world is heating up, and it is everyone’s responsibility to ensure that we leave behind a livable planet for future generations. 

This is why cryptocurrencies with a low environmental footprint are becoming more attractive, especially to institutional investors. Ethereum has made significant strides on this front by changing from a Proof-of-Work algorithm to a Proof-of-Stake algorithm. 

The shift started in 2020 and is completed in what is known as Ethereum 2.0. With this transition, Ethereum’s carbon footprint will be less than a percentage of what it was with POW. 

That’s because rather than mining, which is energy-intensive, protecting the network will now entail buying tokens and being rewarded with more tokens for staking. This makes Ethereum attractive to institutional investors, who mostly have a social responsibility to their backers.

This could see Ethereum’s demand grow, making it a high potential cryptocurrency to invest in at current prices.

3. Ethereum Is Censorship Resistant

Lately, there has been an increase in censorship-related issues on the internet. Big tech companies have so much power and can determine what is said or not said on their platforms.

Ethereum is coming in as a solution to the issue of censorship, and that’s a big deal at this point. Ethereum is censorship resistant because it has no central point of control. This means no one can shut down Ethereum; by extension, the data stored on Ethereum cannot be stopped, not even by the government.

This factor could see even more Dapps launch on the Ethereum blockchain going into the future. Since it requires Ether tokens to launch Dapps on Ethereum, this rising demand will likely translate into a higher price for the tokens. That’s why Ethereum stands out as a highly undervalued altcoin today. The price is low, but the potential demand is high.

4. Ethereum Has The Potential To Redefine The Internet

The internet is huge, and since it became a thing has changed the world as we know it. Today, billions of people are connected to the internet, and trillion-dollar companies have their origins in the internet age.

Now imagine a scenario where Ethereum changes the world as it is today and becomes a world computer. Since it launched, Ethereum has experienced a surge in popularity as a launch platform for decentralized applications.

This use case continues to grow, and today, Ethereum is used as a launchpad for all kinds of smart contracts. Ethereum is being used to digitize diverse assets in a decentralized environment.

As this adoption grows, so does the growth in popularity of Ethereum’s programming language, Solidity, which is further helping entrench Ethereum as the launchpad for Dapps.

This places Ethereum in a unique position to become the world’s largest and most important decentralized computer, effectively reshaping the internet. With time, multi-billion-dollar decentralized organizations with global influence will run on Ethereum, which is a big deal in terms of ETH’s potential value growth. It makes Ethereum a smart cryptocurrency investment today when adoption is still in its infancy.

Don't Miss: Ethereum (ETH) Price Predictions

5. True Decentralization Is Proving To Be An Asset

If you are still wondering whether Ethereum is a smart investment today, consider that it is one of the most decentralized cryptocurrencies in the market today. In fact, Ethereum is almost at par with Bitcoin when it comes to decentralization. 

But why does Ethereum decentralization matter? For the last couple of years, it didn’t matter that much. Most of the top performing cryptocurrencies in the 2020/21 bull run were heavily centralized. Similarly, many top-performing Ethereum alternatives mostly have an element of centralization. 

However, things are changing, and investors are beginning to realize that decentralization may be one of the most significant assets you can count on in this market. This followed the collapse of Terra, a $40 billion project, and the move by Celsius and a couple of other cryptocurrency platforms to limit withdrawals.  

This is a wake-up call for investors that there is a risk in putting all your hopes in an individual or a single organization in an unregulated market like crypto. 

The power of decentralization makes Ethereum a heavily undervalued cryptocurrency at current prices. More investors seeking a mix of safety and gains are likely to turn more to Ethereum going into the future.

6. Ethereum Tokenomics Are Changing 

Since the hard fork of August 2021, Ethereum has experienced a massive change in its tokenomics. Unlike in the past, the more Ethereum is adopted, the more Ether is burned in the form of fees. 

This was why Ethereum rallied from around $1k in August 2021 to highs of $4800 by December 2021. Going into the future, Ethereum is likely to get even more adopted thanks to its resilience even in tough market conditions. 

With aspects of the market, like DeFi and NFTs, all likely to grow, the burn rate of Ethereum will accelerate. The result is that Ethereum’s price could go up exponentially as demand outstrips supply going into the future. 

Of all the reasons to consider investing in Ethereum, this is probably one of those that make Ethereum a smart cryptocurrency investment in 2022. 

7. Ethereum Is Handling The Competition Very Well

The Ethereum blockchain has faced a lot of competition since 2017, when its scaling issues became most apparent. This was followed by a rise of many Ethereum killers, all angling to dethrone Ethereum from its position as the number one Dapps platform. 

However, none of these competitors have in the last 5-years managed to dethrone Ethereum from its top position. In fact, many of them fell by the wayside after the hype. This has a lot to do with the fact that many have focused on scalability and transaction fees at the expense of decentralization.

Now that Ethereum is about to eliminate its scaling issues by relying more on layer-2 solutions, it may be even more challenging for Ethereum competitors to compete. This will likely see Ethereum consolidate its position as the number one Dapps platform in the market. This gives Ethereum an edge in terms of adoption, a factor that also makes it a smart cryptocurrency investment to make today. 

8. Ethereum Is Available On Most Exchanges

Still, wondering whether Ethereum is a good cryptocurrency worthy of buying now? Consider that it is one of the few cryptocurrencies that is listed on all exchanges, both big and small. 

This is an advantage for Ethereum in that it will always be a liquid asset, one that investors can enter and exit at any given time. In a market as high risk as cryptocurrencies, this is a big plus. That’s because investors know they can easily buy and sell, depending on the prevailing market conditions.

buy ethereum

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

Drawbacks To Investing In Ethereum

While Ethereum is one of the best cryptocurrency investments in the market today, it is not without its issues. There is always the chance that Ethereum can underperform the market or even fail as an investment. 

Just to help you make an informed investment decision, here are some risks to be aware of when investing in Ethereum. 

The competition remains a threat

Despite Ethereum retaining its position as the number one Dapps platform in the market, the number of competitors is rising. Some of the newer ones are doing pretty well on key metrics such as security and decentralization. 

This means there is a risk of Ethereum seeing a drop in its market share over time. The same could reflect in the price, in the form of ETH underperforming the broader market. It’s a risk that every investor should consider when investing in Ethereum.

The threat of hackers

Cryptocurrencies are always at the risk of bad actors, and Ethereum has seen its fair share of malicious attacks. For instance, back in 2016, Ethereum suffered a hack, and the Ethereum DAO lost $70 million. However, the community moved to restore the funds through a hard fork. 

More recently, a 7-block reorganization of the Ethereum blockchain posed a threat, though the situation did not hurt ETH’s price. Nonetheless, it points to some of the risks that Ethereum and all cryptocurrency investors should be aware of before buying ETH. 

That said, you can deal with these issues by investing in a diversified cryptocurrency portfolio. The idea is that, if Ethereum underperforms, you can be cushioned by the other cryptocurrencies in your portfolio. 

Is Ethereum A Smart Cryptocurrency Investment Today?

Up to this point, you know the pros and cons of Ethereum and whether it is a good cryptocurrency investment or not. 

However, before you decide to buy Ethereum, below are a few of the things you should give priority to. 

  1. Only invest in Ethereum through regulated brokers.
  2. Secure your account with a strong password. 
  3. Once you have bought Ethereum, please don’t leave it on exchanges. Take it out and store it in either a hardware or a software wallet. 
  4. Diversify your portfolio by investing in other cryptocurrencies as well. You don’t want market eventualities to catch you flat-footed investing in a single cryptocurrency. 

If, up to this point, you are convinced that Ethereum is a smart cryptocurrency investment, let’s now take an in-depth look at the process of buying Ethereum. 

buy ethereum

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

Where To Buy Ethereum

One of the goals of Trading Education is to give you all the information you need to make informed decisions about investing in cryptocurrencies. 

That’s why we have taken the time to create a list of some of the best exchanges where you can buy Ethereum today. 

Ethereum Vs Solana – Which Is A Better Buy?

Solana and Ethereum are two of the best platform blockchains in the market today. Rather than choosing one, it makes sense to invest in the two of them. Both have the potential to become top-performing cryptocurrencies going into the future.

However, if you don’t have the resources and want to maximize on one of the two, then it may be more prudent to focus on Ethereum. The odds are that Ethereum could outperform Solana in the foreseeable future. Here’s why. 

The news is with regards to the transition to Ethereum 2.0. The process started almost two years ago and was completed in September 2022.  

The impact this will have on Ethereum is huge and could see Ethereum lead the market out of the current bear market and into another bull market. The same is likely to see Ethereum outperform its competitors, making it a high potential cryptocurrency to buy in 2022. 

Besides the hype, the transition comes at a time when the value of Ethereum’s decentralization is becoming more apparent to investors. This is after the almost overnight collapse of Terra a few months ago. This coupled with the fact that Ethereum is set to scale much better, could play well into its value growth going into the future. 

Closely related to the transition to Ethereum 2.0 is that Ethereum has been deflationary for a while now. However, the token burn will accelerate once the transition to Ethereum 2.0 is fully released. Since Ethereum adoption is among the highest in crypto, an increase in the amount of Ethereum burned as fees could see ETH outperform Solana going into the future. 

Clearly, the odds are in favor of Ethereum over Solana. As such, if you are limited to an either-or, then Ethereum comes off as a better investment in the short to medium term. However, it is essential to remember that cryptocurrencies are volatile assets, and no one can predict the future with certainty.

As such, it makes sense to spread the risk on both Ethereum and Solana. Not only do you reduce the risks, but you also increase the odds of higher gains since Solana, too, is one of the most undervalued cryptocurrencies in the market today. 

Final Take – Is Ethereum A Good Cryptocurrency To Buy Now?

Absolutely! Ethereum is one of the best cryptocurrencies to buy now.

Ethereum has proven to be highly resilient despite its scaling challenges. Since it launched in 2015, Ethereum has rallied by more than 55,300%, and its odds of even bigger returns are quite high. 

That’s because Ethereum is almost done with significantly reducing the scaling issues it has dealt with over the last couple of years. Ethereum has also become a deflationary cryptocurrency, a plus in bull markets.

These factors, coupled with Ethereum’s standing as the second largest cryptocurrency, make it an excellent cryptocurrency to buy in 2022 and hold long-term. 

So how do you buy Ethereum safely and at a low cost? While there are many brokers, one of the best you can consider is eToro. eToro is regulated across all major jurisdictions, including the U.S, the UK, Australia, and Cyprus. 

Besides, opening an eToro account is easy, and anyone can do it. All you have to do is follow the steps below:

  • Visit the eToro homepage and click on the signup button. You will be required to fill up a form, a process that will take a few minutes. 
  • Once you signup, eToro will ask you for verification documents for KYC purposes.
  • After sending your ID documents, your account will be ready, and the next step will be to make a deposit. eToro accepts deposits as low as $50.
  • Once your money is in the account, you can buy Ethereum for as low as $10.

eToro – The Best Place To Buy Ethereum

Open an account with eToro, deposit some funds with USD, and finally – buy ETH from just $10.

trade crypto on etoro

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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