Have you considered buying Ethereum? If you are struggling with this dilemma, then you have come to the right place. This guide gives you everything you need to know about investing in Ethereum (ETH) . By the time you are done reading it, you will be in a position to make an informed decision.
This article will seek to answer the question ‘Is Ethereum a good investment?‘ by discussing the leading blockchain coin’s utility and price prospects before highlighting where you can invest in ETH today – with low trading fees.
Ethereum is undoubtedly one of the best cryptocurrencies and is still regarded as one of the top crypto other than Bitcoin, especially now there is a belief that the investors are bullish on Ethereum.
According to Cathie Wood of Ark Invest, Ethereum has the potential to trade between $170,000 and $180,000 by 2030. Cathie Wood's prediction is based on Ethereum's potential to replace the conventional financial system.
However, for those wondering ‘Is Ethereum a good investment?’It's vital to dig a little deeper and look for evidence to identify and provide the strengths and weaknesses of the leading coin .
Overall, Ethereum has the real-world utility that sustains upwards momentum over the longer term. The coin’s initial price rise wasn't driven by hype and awareness generated by the media.
For this reason, our opinion is that Ethereum is best suited to low risk-seeking crypto investors who are happy to open a position out of expectation. On the Upside, Ethereum can undoubtedly still provide very positive returns – It's probably the best crypto asset for risk-averse investors.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Why Ethereum Is A Good Investment
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. 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.
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.
On top of that, Ethereum’s cryptocurrency ETH is one of the cryptocurrencies rising in popularity. The great news is that, unlike Bitcoin, Ethereum is uncapped. There are around 120 million ETH in circulation at the time of writing and this number is increasing.
Crypto experts believe the ETH coin has plenty of growth ahead and that investing in Ethereum is a smart financial decision for the long-term. Therefore, it could be a good time to invest in Ethereum ETH while the coin is performing very well.
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.
In the following sections, we’ll break all Ethereum-related myths circulating online and help you come to your own conclusion on is Ethereum a good investment.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
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!
Pros of Ethereum
What are the benefits of investing in Ethereum?
What are the benefits of investing in Ethereum? 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 Vitalik Buterin - is admired by many.
And part of the reason people have so much trust in Ethereum is their transparent roadmap.
Ethereum’s developer ecosystem is also expanding, with more than 250,000 active developers, as per ConsenSys. Such strong support is 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 over 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 (such as NFTs), patents, voting history, medical records, ID verification, crypto-collectables, and other complex agreements.
✅ Ethereum Continues To Attract More Businesses
Many big companies support the development of Ethereum, with Ethereum Enterprise Alliance being one of the leading organizations monitoring Ethereum.
As third parties become redundant, it is likely more and more investors will get into Ethereum investing.
One of the main figures interested in Ethereum is venture capital firm 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.
And on that topic, it’s no secret that CryptoKitties - with the opportunity to improve digital ownership - took the world by storm and reached a funding amount of $12 million, 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, Vitalik once said that Ethereum will be able to process over one million transactions per second soon. If possible, it would be a huge advantage to investing in Ethereum.
✅ More Secure Than Most Cryptos
Ethereum has a very large community of active developers spread across the world. This means that it is harder for malicious users to gain control of the blockchain.
In blockchain technology, popularity = security. Arguably, the only crypto more secure than Ethereum is Bitcoin.
✅ Ethereum 2.0 (Eth2) Is Coming Soon
By far, the biggest reason to buy Ethereum in 2022 is Ethereum 2.0! One of Ethereum’s main goals this year is its move to proof-of-stake and fully launching Ethereum 2.0.
The transition is taking place through a series of upgrades (it’s not like turning off and on a switch), and while we still don’t know when it will be completed, it is believed to happen by the end of 2022 and could do wonders for the price of ETH.
According to Emily Mason of Forbes, a report by two senior analysts at JPMorgan estimated that Ethereum’s move to proof-of-stake could lead to “staking pay-outs to balloon to $20 billion in the quarters following the launch of Ethereum 2.0 and $40 billion by 2025”.
Further to that, Ethereum will go from being an ‘inflationary’ crypto to ‘disinflationary’ crypto after the upgrade because more of the token supply will be burned.
✅ Ethereum Is The Hub Of The Crypto Market
Every crypto wants to build bridges to Ethereum and many crypto projects, including Binance Coin and Tron, started on the Ethereum network as ERC-20 tokens before moving to their own chain.
Today, some of the biggest cryptos are still based on Ethereum, such as Uniswap.
When cryptos build bridges to Ethereum, it opens them up to much of the crypto market. Even Ethereum Classic, which had a brutal divorce from Ethereum, is building a bridge to access Ethereum’s resources.
✅ Second-Most Popular Crypto In The Market
After Bitcoin, most newbie crypto traders start looking at Ethereum. As the second-most popular crypto, it looks the safest and profitable.
Furthermore, there are tonnes more material on Ethereum online which helps people understand its goals. (Plus, it’s not as complex to understand as some other projects out there, e.g., Uniswap, Chainlink.)
Typically, most newbie traders only start looking into other cryptos once they’re satisfied with Ethereum.
✅ Institutions Continue To Find New Ways To Trade Ethereum
Buying and selling Ethereum via an exchange or broker is not the only way to trade it. There are tonnes of investment vehicles where you can participate in ETH without actually owning it.
One of the biggest investment products created for Ethereum so far is the Grayscale® Ethereum Trust, a product of Grayscale, which is owned by Barry Silbert’s Digital Currency Group.
At the time of writing, the trust has $10 billion in assets and has grown 305.77 % since its inception.
And Anthony Scaramucci, who briefly served as Donald Trump’s White House Communications Director, has said he will create a private Ethereum fund and will file for an Ether ETF as well.
All this not only increases the amount of Ethereum trading, making it a more liquid asset to trade, it also spreads the word and increases adoption - the most crucial factor to Ethereum’s price in the long run.
Ready to invest in ETH?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Cons of Ethereum
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 Struggles 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 because the more features it includes, the more vulnerabilities there are that could be exposed.
On top of that, Ethereum still must deal with scaling and network congestion issues 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.
❌ High Transaction Fees Have Pushed Some Developers Away
In early 2021, congestion on the Ethereum network pushed transaction fees to extraordinary levels and many projects looked to migrate elsewhere where transaction fees are more stable.
YCharts captured how absurdly high transaction fees reached in 2021, taking off almost instantly from January, spiking in February, April, and then twice in May.
Uncertainty also makes building dApps tough. It’s not something that can be done when you don’t know how much Ether you will need each day. Such uncertainty can milk a budget dry.
❌ 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.
❌ The Smart Contract Arena Is Extremely Competitive
While Ethereum may have merged the ideas of smart contracts and blockchain and introduced the idea of dApps, they are far from alone in this market.
Cardano, Binance Coin, Ethereum Classic, Tezos, EOS, Chainlink, Polkadot, Stellar - the list goes on and on of potential competitors.
Each one building off what Ethereum started and adding something a little extra that could give them an advantage in the market.
Of the list above, Cardano and Binance Coin present the biggest threats to Ethereum right now.
Cardano, which was founded by Ethereum co-founder Charles Hoskinson, has a peer review system and it could wipe the floor with Ethereum if its smart contracts appear to be better.
Meanwhile, Binance Coin’s Binance Smart Chain has proven to be a major hit, offering a much cheaper platform to create smart contracts on.
❌ Ether Is Not Capped!
Yes, we listed this as a pro above, but for many traders, it’s also a major con because it means Ether lacks scarcity.
In comparison to Bitcoin, which is capped at 21 million coins, an unlimited amount of Ethereum can exist.
If the market is suddenly flooded with new Ethereum, it would be a disaster for Ethereum holders as it would devalue their profits.
Who Should Include Ethereum In Their Portfolios?
- 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.
- Cryptocurrency traders: Ethereum is the second well-known cryptocurrency, and therefore, many crypto traders buy it as part of their cryptocurrency portfolio.
- 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.
- 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 cryptos, it could become the new gold safe-haven for some traders.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Where to Buy Ethereum
Until now, we’ve focused on answering questions like ‘is Ethereum a good buy‘ and ‘Is Ethereum a smart investment?’.
However, it’s also important to mention where to invest in ETH if you are ready to do so. Fortunately, many of the very best crypto exchanges support Ethereum trading and investing due to the coin’s popularity with both retail and institutional investors.
Our number one pick when it comes to the best place to buy ETH is eToro. The Platform is one of the best trading sites in the world, with over 30 million registered clients. The site is well-known for its safety and cost-effectiveness and is regulated by several countries and entities, including FINRA, FinCEN, FCA, and ASIC.
In terms of deposits, eToro allows US and UK users to fund their accounts with as little as $10. Instant deposits can be made via credit/debit card or e-wallet, with full support for PayPal, Skrill, and Neteller. Notably, deposits are free to complete if made in USD.
Should I Buy Ethereum?
Overall, is Ethereum a good investment? Advocates for Ethereum believe that it is one of the best altcoins and the most undervalued crypto in the market today, even better after the huge price declines in recent years.
In our opinion, Ethereum could be a good investment for people who have some extra money and are happy to open a speculative buy.
There’s certainly scope for Ethereum to provide double digit returns. For this reason, DOGE investing is perhaps more suited to low risk-seeking investors rather than high volatility investors.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Is Ethereum a Good Investment – Conclusion
To summarize, this article has covered everything you need to know about making an Ethereum investment, highlighting the coin’s pros and cons before presenting in-depth analysis of the potential of the leading coin.
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 10,000% 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.
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.
eToro – The Best Place To Buy Ethereum
Open an account with eToro, deposit some funds with USD, and finally – buy ETH from just $10.
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
FAQs
Does Ethereum have a future?
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.
Is Ethereum Better Than Bitcoin?
In several ways, Ethereum is better than Bitcoin technologically and has far more applications. Bitcoin was designed to be digital cash, an alternate way to transact value from one individual to another using blockchain technology. Ethereum took that idea to the next level, seeing the full potential of blockchain technology to decentralise far more than just transactions. And with far more use cases available to Ethereum, there is potential to see its use spread much faster.
Where to invest in Ethereum?
eToro is the most lucrative alternative. The prestigious award trading platform allows traders to create a portfolio, serving as a one-stop-shop for traders finding exposure to cryptocurrency.