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What Is Ethereum and Is It Worth Investing in Ethereum in 2021?

Last Updated November 17th 2020

ETH Investing Guide 2021

What Is Ethereum and Is It Worth Investing in Ethereum in 2021? | Getting Started

Are you interested in Ethereum? Anticipating the year 2021 in hopes that the impact of the ongoing coronavirus pandemic on the financial sector would subside? Then keep on reading to find out what Ethereum is and decide for yourself if investing in Ethereum in 2021 is worth it.

Ethereum is a popular investment choice among cryptocurrency traders and blockchain enthusiasts, so we at Trading Education are here to help you understand the complexities of cryptocurrency investing and the secrets to crypto success.

What Is Ethereum? Ethereum Explained

So, what is Ethereum and is it worth investing in Ethereum in 2021? Even if you are new to the cryptocurrency investing sector, perhaps you know that Ethereum - with its native coin ether (ETH) - is the second most popular cryptocurrency project worldwide and one of the main competitors of Bitcoin.

Ethereum was launched in 2015 by a young and ambitious team led by visionary Vitalik Buterin. In less than a decade, Ethereum has managed to transform not only cryptocurrency investing but traditional finance to a point of no return

Ethereum is much more than a cryptocurrency. It’s an open-source blockchain platform that supports the development of smart contracts, decentralised apps (dApps), decentralised finance (DeFi) projects, and an impressive number of tokens. 

Talking about ERC-20 tokens, or coins created on the Ethereum blockchain, we should mention that many well-known cryptos such as Tron have started on the Ethereum platform.

Ethereum has embraced not only an impressive number of innovative investment opportunities but has the potential to improve different sectors beyond finance. Some of the areas where Ethereum can lead to tech advancements are gaming, medicine, music, and personal data verification.

Do you remember the craze around Crypto Kitties? Well, did you know this iconic blockchain-based game was developed on Ethereum? How cool is that!

So, what is Ethereum in simple words? Ethereum is many things, true! But there’s one main thing to remember: Ethereum is a blockchain project that has transformed the whole investment sector, so ETH will keep attracting investors long after 2021.

How Does Ethereum Work?

While you don’t have to be an IT genius or a Solidity (Ethereum’s programming language) expert to start investing in Ethereum in 2021, it’s good to know the basic principles behind Ethereum. Let’s see how it works!

Ethereum, like any other crypto platform, is decentralised with nodes being spread across the globe. This means there are no authorities, no dependence on central banks, and no third parties imposing skyrocketing transaction costs.

In other words, Ethereum allows users to make agreements with each other without using third parties. Do you want to transfer money or sell goods? Do you want to launch a fundraising project? Ethereum enables all these processes at low costs and fast processing times.

It’s no wonder that Ethereum is considered the king of smart contracts, which are self-executing programmes that reduce the risks of fraud. Because data is stored on the blockchain, users can easily see transactions and manage their own data.

Ethereum’s developer team is expanding and setting clear goals to help the system deal with scalability issues and bugs. If things go as planned, Ethereum 2.0 will be launched soon, so in 2021 Ethereum will focus on proof-of-stake instead of proof-of-work. 

This might make Ethereum a great investment option to watch - an investment option that is definitely worth considering.

What Is Ether?

If you find the technology behind Ethereum tempting and think that Ethereum is worth investing in 2021, let’s learn more about Ethereum’s native currency: ether!

What is Ether then? Ether or ETH was created to help programmers support the platform and cover all power costs involved in the process. Ether also acts as gas used to run smart contracts. 

One thing we should note is that ether is not capped, which is one of the pros of investing in Ethereum. In contrast, Bitcoin has a supply limited to 21 million coins.

ether supply

Ether Supply Growth (Source: EtherScan; Retrieved from https://etherscan.io/chart/ethersupplygrowth)

Interestingly, ether was just $0.04 when it was introduced to the crypto community and managed to hit a high of over $1,400 in 2017. 

ethereum historical price graph

Ethereum Price History (Source: Wikimedia Commons; Retrieved from https://commons.wikimedia.org/wiki/File:Ethereum_Price_History.png)

Now when you have an answer to your question “What is Ethereum and ETH?”, let’s see if investing in Ethereum in 2021 is a good idea.

Is It Worth Investing in Ethereum in 2021?

Okay, let’s be honest here! The truth is that we can’t say "you shoud investing in Ethereum". Simply because it depends on you and your financial goals to decide whether to invest in Ethereum or not!

What we can do here is to provide concise information to help you make an informed decision.  So what do stats say about Ethereum investing?

Ethereum is the second-largest and most popular crypto platform after Bitcoin. It has a market cap of $52,369,098,041 and a 24-hour trading volume of $14,095,961,090, as of November 2020, which makes ETH the second most traded cryptocurrency.

Will these numbers continue to progress in 2021? Only 2021 will tell.

And let’s be honest: we all are looking forward to the end of 2020, right?! The year 2020 has been a turbulent year for many investments, including cryptocurrency trading. The bearish market in March 2020 triggered by the ongoing pandemic made the crypto community gasp. 

Fortunately, Ethereum has managed to rise again. While in March one ETH traded at $95, now one ETH is trading at $461.83 (as stated above), which makes Ethereum investing worthy.

How Has Ethereum Been Developing Recently?

To understand if Ethereum is worth investing in 2021, we have to stay up-to-date with the latest innovations and crypto news - factors that may turn the cryptocurrency community upside down.

As stated earlier, one of the most anticipated events is the launch of Ethereum 2.0. Though some developers, such as Ryan Selkis, think that the upgrade may be delayed till next year, it’s a fact that many are excited about the upcoming changes. 

And guess what: Ethereum transactions have increased to over one million per day!

ethereum transactions chart

Ethereum Transactions (Source: YCharts; Retrieved from https://ycharts.com/indicators/ethereum_transactions_per_day )

While there are hundreds of competitors trying to replace Ethereum, with EOS, Tron, and Cardano being among the main rivals of Ethereum, Ethereum is still one of the leading cryptos when it comes to mass adoption. Data shows that there are more than 4.5 million active Ethereum users.

Talking about developments, we can’t ignore the impact of the pandemic. Still fighting the novel coronavirus, governments might start shifting towards cryptocurrency adoption. Simply because many people fear that cash payments may increase the spread of COVID-19.

Besides, in places where economies are shrinking and inflation is increasing, the trading volume of ETH and other cryptos has jumped up to new highs.

Would you consider investing in ETH?

How Much Will Ethereum Be Worth?

Now when you know more about Ethereum and Ethereum investing in 2021, you might also ask how much it will be worth.

The truth is that nobody can make accurate predictions about cryptocurrency investing as the market is marked by high volatility and uncertainty. The best thing one can do is to analyse past performance and consider factors, such as demand and supply, market sentiment, crypto news, and anticipated tech innovations.

For instance, the increasing importance of DeFi, as well as the anticipated Ethereum 2.0, may make ETH prices go up - despite the implications of the coronavirus pandemic on global trade and economy.

According to price predictions provided by Wallet Investor, Ethereum is not a good short-term investment as ETH may trade on an average of $191.3 during the first half of 2021. In the long-term, though, ETH may reach $494 by 2023 (as reported by the same source).

Trading Beasts, on the other hand, expect Ethereum to trade at around $260 by 2022.

Interestingly, according to Digital Coin Price, Ethereum has a more positive future. Some investors, such as Ian McLeod explain that Bitcoin investors might move to Ethereum investing, which would make Bitcoin prices fall and Ethereum prices rise, respectively.

Other more extreme predictions, such as the one provided by Coin Switch, claim that ETH may reach $3844 by 2025.

If in the next few years, Ethereum becomes widely used across the globe, its value may increase and hit $10,000. Expert James Todaro, for instance, says that due to the increase of DeFi, Ethereum may sell for $9,000 per coin in the near future.

Based on similar price projections and data analysis, experts believe that Ethereum may reach a trillion-dollar market cap.

ethereum price forecast

Ethereum Price Predictions 2020-2027 (Source: DigitalCoinPrice.com)

Should I Invest in Ethereum?

So, if you are willing to invest in Ethereum in 2021, then you should acquire in-depth knowledge about the cryptocurrency market and all the factors that may affect Ethereum’s future and prices.

Additionally, you should do your research and decide if possible rewards may outweigh risks. And believe us: cryptocurrency investing can be a risky venture when not done correctly.

Alarmingly, figures show that 90% of traders lose money and quit for good in their first year due to ineffective training and poor decision-making.

But hey! You can be one of the top 10% investors out there. Investing in cryptocurrency can lead to high profits if you know how to play your cards and embrace losses.

Who should consider adding Ethereum ETH in their portfolios in 2021?

Because of the potential of Ethereum as an investment in 2021, more and more beginners and experienced investors are willing to add Ethereum to their portfolios.

As we know, portfolio diversification is a great way to reduce risks by investing in different assets.

Investing in ETH is a great option for:

  • Cryptocurrency traders: Clearly, Ethereum is a desired asset among cryptocurrency traders, including day traders, who believe in ETH investing, both in the short- and long-term.
  • Forex traders: Given the impact of the 2019-2020 coronavirus pandemic on fiat currencies, many forex traders may turn to cryptocurrency investing, which is perceived by some as a safe haven.
  • Blockchain enthusiasts: Ethereum is much more than a cryptocurrency. By allowing the development of dApps and smart contracts, Ethereum has enhanced the use of blockchain technology and shaped the future of decentralised finance.

What Is Ethereum and Is It Worth Investing in 2021? | Final Words

invest in ethereum

With its innovative technology and ideology, there’s no doubt that Ethereum has reshaped the world of altcoin investing.  

Though Ethereum has had numerous ups and downs, including its notorious split into Ethereum (ETH) and Ethereum Classic (ETC), Ethereum - one of the major rivals of Bitcoin - has proven that it’s here to stay long after 2020.

While it’s up to you to decide if you should invest in Ethereum in 2021, let’s not forget that some experts believe it may reach its old high of over $1,000 and even hit $9,000 in the near future.

Now you know what What is Ethereum and why it's Worth Investing in Ethereum in 2021. If you decide to invest in Ethereum, you may be pleased to know that etoro provides the ability to trade with Crypto assets, including Ethereum, and CFDs on up to 90+ cryptocurrencies.

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Key Points

  • Ethereum is the second most popular crypto platform after Bitcoin.
  • Ethereum is more than a cryptocurrency. It enables the development of dApps and smart contracts, paving the future of decentralised finance.
  • Ethereum’s native crypto ETH is one of the most traded assets, currently trading at $461.83.
  • One of the most anticipated events this year is the launch of Ethereum 2.0 that will move to proof-of-stake.
  • Despite the high competition and volatility in the sector, experts are positive about ETH prices and growth in the future.
  • Do your own research. Make sure you carefully consider all the factors that affect the price of Ethereum before deciding whether or not to invest in Ethereum (ETH).

Do you think that Ethereum is a good investment for 2021?

If you liked our article What Is Ethereum and Is It Worth Investing in Ethereum in 2021 please share it with anyone interested in crypto investing and blockchain technology.

FAQs

What will ETH worth in 2021?

While making price predictions is almost impossible due to the high volatility of the cryptocurrency market, especially in times of financial and social turbulence, experts are positive about Ethereum’s growth in 2021. Based on data analysis and price predictions, ETH may reach a potential high of $1,000 or hit a potential low of $425. In the long-term, some experts believe that ETH may even reach $9,000 per coin.

What cryptos to invest in 2021?

Many investors expect a bullish 2021 in hopes that things will start going back to normal despite the ongoing coronavirus pandemic. Some of the top cryptos to invest in 2021 include Ethereum, Bitcoin, Ripple, Litecoin, Tezos, and Cardano. Always do your research and consider risks before you invest in cryptocurrency.

Will investing in Ethereum and cryptocurrency make you rich?

Cryptocurrency investing is a risky financial venture that can, however, help you increase your wealth over time. To make money trading ETH or other cryptos, one should clarify their financial goals, focus on cryptocurrency trading education and practice, and invest money they can afford to lose. One of the safest ways to invest in Ethereum is to choose a reliable exchange like eToro.

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