If you're looking to buy a fast growing cryptocurrency trading at an attractive price, there's no need to look further than Ethereum (ETH).
Cryptocurrencies are skyrocketing in popularity without any signs of slowing down. Blockchain technology and digital assets have revolutionized the world of finance over the past decade. Assets like Bitcoin (BTC) and Ether (ETH) have proven that they are more than just a means of payment. Investors are increasingly using these coins as a hedge against inflation and as a store of value.
Ethereum is a popular decentralized blockchain network that is beaming with endless possibilities. The platform’s native token ETH is up a whopping 2,500% since the stock market crashed in March 2020. By May 2021, the world’s second-largest cryptocurrency had risen by more than 360%.
Just like Bitcoin, Ether is also an excellent store of value. ETH has been competing with BTC for the top spot since its release in 2015. It even came close to outperforming the leading crypto in February 2018. Both these coins have hit new all-time highs since then, and there seems to be more room for both to grow in 2021. Some experts have predicted that ETH will “flip” BTC this market cycle to become the largest cryptocurrency by market cap.
ETH’s explosive price movements and growing market cap may make some investors feel like it may be too late to invest in crypto now. However, that is far from being true. ETH is poised for an unmatched bull rally in the future, making this the best time to buy the coin.
Let us understand what Ethereum is and take a look at the reasons why this growing asset could deliver substantial upside in the future.
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What Is Ethereum And Why Buy It?
Ethereum is an open-source distributed blockchain network that enables simplified smart contract scripting. Essentially, the platform allows developers to build decentralized applications (dApps) that function on blockchains. Consequently, the Ethereum network has introduced the world to various new blockchain-based apps and functionalities.
It is almost impossible to venture into the crypto space without being aware of Ethereum. Notably, a combination of factors has led to the popularity of ETH over the past few years.
Ethereum’s cryptocurrency ETH is the fuel that runs the platform. It is commonly used to pay the transaction fees charged on the network. Just like Bitcoin, Ether is a peer-to-peer (P2P) cryptocurrency. In addition to the transactions, every single computation on the Ethereum network requires you to pay gas fees to the miners. These fees need to be paid by ETH.
For the uninitiated, if a user wants to deploy a contract on Ethereum, they would need gas, and they would have to pay for that gas in ETH. So gas is the execution fee paid by the user for running a transaction on Ethereum. Ether can also be used for building dApps, smart contracts, and conducting regular peer-to-peer payments.
The remarkable performance and growth of Ethereum have attracted institutional and traditional investors alike.
Ethereum provides investors with a variety of advantages over conventional investments. Some of these advantages include:
Liquidity
Ethereum is one of the most liquid investment assets out there, thanks to the worldwide availability of exchanges, trading platforms, and online brokerages. Investors can easily trade their Ether for cash or assets like gold instantly with low fees.
The high liquidity associated with ETH makes it an ideal investment vessel for traders looking to make short-term profits. On the other hand, cryptocurrencies are also great long-term investments due to their high market demand.
Reduced inflation risk
Unlike fiat currencies regulated by governments, the Ethereum network has a transparent inflation plan, subject to less interference. The blockchain ecosystem is infinite, and there’s no need for investors to worry about their crypto assets being deflated.
Volatility
Volatility was earlier seen as a negative factor. However, investors have gradually realized market cycle patterns and are able to profit from the parabolic gains caused by volatile market bubbles.
Check Out: Is Ethereum a Good Investment Right Now?
Crypto asset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
Ethereum and Decentralized Finance (DeFi)
Decentralized finance has been the talk of the blockchain town for the past year now. Notably, almost all of the DeFi projects are built on top of the Ethereum platform. There are large amounts of money flowing into the DeFi space, and as a consequence, there has been a significant rise in the price of Ether itself.
DeFi broadly refers to the shift from conventional, centralized financial systems to peer-to-peer (P2P) finance facilitated by decentralized technologies built on the Ethereum blockchain. DeFi protocols include lending and borrowing platforms, stablecoins, tokenized BTC, etc.
The DeFi ecosystem has collectively rolled out a comprehensive network of integrated protocols and financial instruments. Currently, with more than $13 billion worth of value locked in Ethereum smart contracts, DeFi is emerging as the most dynamic sector in the blockchain space, with a wide array of use cases for institutions, individuals, and developers.
DeFi protocols on Ethereum are dependent on the scalability of the Ethereum network. These projects make up a large part of the Ethereum ecosystem. It is safe to say that DeFi has seen incredible growth, and this growth is linked to the development of Ethereum.
The growth of DeFi and Ethereum is changing the way money is used. Decentralized finance on Ethereum has the potential to transform the way the financial world operates. Since decentralized finance is still on the rise, investing in Ether now would be an excellent way to become a part of the DeFi family.
The Upcoming Ethereum 2.0
Ethereum is working towards an upgrade (Ethereum 2.0) to push the platform to become completely decentralized. The crypto community considers the launch of Ethereum 2.0 to be the most notable event since Bitcoin. ETH 2.0 will address longstanding issues that Ethereum is facing, including the problems with security and scalability.
Ethereum 2.0, also known as Serenity, will address the speed, scalability, and efficiency of the Ethereum network. The update will also enable the network to process more transactions, eliminating bottlenecks on the platform.
The highly-anticipated update will see Ethereum switch from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) consensus mechanism. Ethereum 2.0 will also address Ethereum’s scalability issues. The upgrade assures to process up to 100,000 transactions per second (TPS) by implementing sharding.
Why This Is The Best Time To Buy Ethereum: Final Thoughts
The crypto space is booming, and there are numerous exciting opportunities to look forward to in the Ethereum ecosystem. The growth of DeFi, NFTs, dApps, and many other offerings are set to push Ethereum and ETH forward in the future.
If you are looking to invest in ETH, now could be the right time. That said, investors must perform due research before investing in crypto assets as they can be 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.
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