Unless you’ve been living under a rock, you know that Ethereum has made several people rich in the last 5 years.
The cryptocurrency market has challenged traditional banking and the world economic systems in many ways. Contrary to the predictions of woe-mongers, the crypto market continues to grow. Its popularity is growing in every continent, making it a viable global investment platform.
People from all parts of the world have invested in digital assets. Many have made fortunes through cryptocurrency trading. There is an abundance of proof that investing in cryptocurrencies like Ethereum can make people rich.
Are you considering investing in Ethereum for the long run? Do you intend to hold this digital coin for as long as ten years? Do you want to know what your investment in Ethereum can amount to in ten years’ time?
If you answered “yes” to any of the questions above, then you’ve come to the right place. We will discuss the possibilities and potentials of investing in Ethereum on a long-term basis. At the end of this guide, you should be able to make an informed decision on the subject.
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What Do You Know About Ethereum?
Ethereum is not a cryptocurrency per se. The native currency, Ether, is not even your average cryptocurrency. To appreciate the platform and its digital currency better, you need to have a closer look at the thesis by Rhan Sean Adams and David Hoffman.
According to the thesis, “Ethereum is a foundation for building an alternative internet-based financial system”.
In simple terms, we can describe Ethereum as a decentralized software that allows developers and programmers to run the code of any application for innovations that can bring changes in the “internet-based financial system.” The platform/system uses blockchain technology and is highly protected from manipulations.
The average person assumes Ethereum is a digital currency used for online transactions. If you've always believed that to be the fact, you should forgive yourself and keep reading diligently.
While there is a monetary aspect to Ethereum, the platform is much bigger than the digital coin (Ether). Ethereum is an innovative platform with endless possibilities. The digital coin (Ether) is the trustless form of collateral used for transactions on the platform.
For the purpose of investing in Ethereum, you will be dealing with Ether. In this guide, we will use Ethereum and Ether interchangeably, but just know that if you are investing, you will be dealing with Ether, which is the digital currency.
What You Need To Know About Ether
Ether is the digital token of Ethereum. It is one of the most popular cryptocurrencies and considered one of the most valuable digital assets.
Ether is recognized as the second-biggest cryptocurrency, behind Bitcoin (BTC). It was launched in July 2015 and started trading on August 7th of the same year. At the time of writing this post, the price of Ether is $2,675.28 according to Coindesk. The market capitalization at that moment was $309.66 billion, securing its position as the second most valuable digital currency.
Ether, like other digital currencies, is considered to be very volatile. However, this year (2021), the currency has made an incredible jump in terms of value. From January 1st to the beginning of May, it had gone up almost 300%. Regardless of checks and balances, Ether has performed wonderfully over the years.
Are you hoping to buy Ethereum that can make you rich in the next ten years? Then you’ve come to the right place. We will discuss Ethereum with real potentials that are most likely to rise in value in the coming years. We will make the guide as simple as possible for everyone to understand, regardless of experience level.
How Can You Make Money From Ethereum?
There are different ways to make money from Ethereum. Programmers and experts can create several applications on the platforms and monetize them. For regular online trading, Ethereum is a good platform to invest in digital coins, especially Ether, and make profits.
Day-trading is one of the quick ways to make money from Ethereum. The method mostly favours experienced individuals who are committed to trading cryptocurrencies and are open to taking risks in the market.
Another wonderful way to make money from Ethereum is through Ethereum HODLing. This implies buying the cryptocurrency and holding it for a considerable period of time. HODLing is based on the strategy of buying a digital coin when the price is down and selling when the price is high. Though it is mostly based on speculation, it has the potentials of making the investor rich.
If you are considering buying Ethereum now with the hope of becoming rich in ten years, then HODLing is the strategy for you. However, you need to realize that it is still a risky venture that may bring a huge reward in the future or end up as a huge disappointment or heartbreak.
Is Ethereum Ideal For Long-Term Investment?
The first thing you want to consider when making a long-term investment is whether the venture or asset you are backing is ideal for long-term investment. For the purpose of this article, you need to ask yourself: is Ethereum ideal for long-term investment?
If you've been an ardent follower of the cryptocurrency market, you will know that Ethereum is widely respected. It is tempting to conclude that it is ideal for long-term investment, but you must also factor in the general risks of investing in cryptocurrencies. You have to consider the attitude of different countries and economies toward cryptocurrencies.
Besides the resistance of some countries and the general nature of the cryptocurrency universe, Ethereum is pretty much an ideal digital coin for long-term investment. Bitcoin might have overshadowed other digital currencies in the last decade, but Ethereum has held its ground and solidified its place as a top digital token with lots of potentials.
Read Also: Is Ethereum a Good Investment Right Now?
Can Ethereum Make You Rich?
One of the first important questions to answer before buying Ethereum for the sake of becoming rich in the future is whether Ether can actually make you rich.
Though we’ve hinted at it in the introductory paragraphs above, it is important to stress here that cryptocurrencies have the potentials to make you rich and even wealthy. Investing in Ethereum has already made several investors super rich. Once you understand the rules and play the game with patience, Ethereum can make you rich a decade from now.
5 Reasons Ethereum Is Considered a Strong and Reliable Cryptocurrency
There are several reasons Ethereum has become so popular that it is considered to be second only to Bitcoin in the crypto universe. To help you appreciate the platform and its native currency better, let’s consider some of its major selling points:
1. Second Only To Bitcoin in Market Capitalization
Any knowledgeable individual understands that market capitalization is one of the best ways to rate an asset in the financial market. This is also the reality in the cryptocurrency market. Ethereum has been the second-biggest cryptocurrency in terms of market capitalization for several years.
Market capitalization aside, Ethereum is being traded more than almost every digital currency. Its volume is rising faster relative to Bitcoin’s, and that is a good thing. ETH/BTC price ratio is up 112% since September 2019, and that is also a very good sign for Ethereum.
As the push for DeFi continues, the price ratio of ETH to BTC will continue to close. Why should that interest you? Well, it simply means there are good chances that investing in Ethereum may be more profitable than investing in Bitcoin in the coming years. However, it is still within the realms of projections.
2. Relationship with DeFi
Decentralized Finance (DeFi) is fast becoming a robust industry of its own under the cryptocurrency universe. If you are conversant with the industry, you will know that the spectacular growth is a plus to Ethereum. DeFi, as we know it, is strongly based on Ethereum.
DeFi is described on the Ethereum Website as a collective term for financial products and services that are accessible to anyone who can use Ethereum – anyone with an internet connection. This definition clearly summarizes the potentials of Ethereum.
Currently, there is so much going on in DeFi and there is no sign that developers and programmers will slow down any moment. There are already several successful DeFi digital coins, and Ethereum can be described as their backbone. The better and more useful DeFi becomes, the better and more valuable Ethereum will become.
3. Formal Institutions Are Pouring In
Just like Bitcoin, Ethereum is becoming widely accepted by many formal institutions. In fact, many big institutions seem to favour Ethereum over other digital assets. This may not be unconnected with the advances of DeFi.
The list of recognizable institutions that have invested in Ethereum will surprise you. Grayscale Investment, which is the investment arm of Digital Currency Group, purchased as much as 756.540 ETH last year, 2020. There must be something the crypto conglomerate is seeing that the average person may not see.
There are indications that some other big names have anonymously purchased Ethereum. According to a Fortune report, Mastercard, UBS, and JPMorgan Chase have all invested in Ethereum. Other big players that have been linked to Ethereum assets include Amazon, Walmart, Microsoft, Reddit, and IBM.
4. High Adoption Rate
Ethereum is one of the few cryptocurrencies that are being used for real-life transactions. Unlike a majority of digital assets that are considered as smokescreens by conservative investors, Ether is becoming a widely accepted means of payment for goods and services.
Adoption rate is one of the factors that determine the true values of digital currencies. Once a coin is acceptable for real-life transactions, it becomes a lot less volatile than regular crypto assets.
5. Ethereum 2.0 and Proof-Of-Stake
Ethereum is moving from “proof of work” to “proof of stake”. To an outsider, this may look like a big risk. However, enthusiasts understand it is the best play for the long-term. Since we expect a lot more cryptocurrencies from the DeFi protocol, the move is necessary.
There is a general consensus that once Ethereum 2.0 is completely rolled out, the platform will be much improved and attractive to investors. At that point, it is expected that even conservative investors may see the need to invest in Ethereum. Of course, this will directly boost the power and value of Ether.
Can You Make Money From Investing In Ethereum?
If you've followed diligently, you can answer this question without delay. For the sake of emphasis, let's categorically state here that it is possible to make money from investing in Ethereum.
As stated earlier, there are different ways to make money from investing in Ethereum. For most people, buying Ether when the price is relatively low and selling when it is high is the most viable way to make money from the platform.
If you are willing to make a significant investment and wait for years, then Ethereum is also a good cryptocurrency option for you. It's been less than six years since Ether started trading, but the value has risen significantly.
To paint a clearer picture, let’s consider the real story of someone who backed Ethereum in the early days.
Real-Life Success Story
In a story published in the Hustle, Dan Conway tells how he got sucked into the cryptocurrency craze and walked away, $13 million richer, all thanks to Ethereum.
As a 45-year-old middle manager at a major San Francisco multi-media company, Dan Conway was earning a respectable income but was really happy with what he described as “fake company culture, bureaucracy, and the endless chains of command.”
In 2015, Dan stumbled upon an article on Bitcoin. He considered investing but relented due to his tendency to addictions. But he couldn’t entirely shut out the possibility of investing in crypto. When he learnt about Ethereum, he was obsessed.
To cut the long story short, Dan Conway invested the life savings of his family in Ethereum in 2016. He bought 6,993 ETH at an average price of $14 per coin – that was a risky $100k investment in a digital coin without any real history.
In early 2018, during what Dan described as “madness”, the price of ETH soared. He contemplated holding on longer but finally decided to sell 11k ETH (which is the majority of his investment) for $10 million.
That’s just one story out of several others. In less than two years, a 100k investment yielded over $10 million. Remember, not all crypto stories end in joy.
Should You Play the Long-Term Game With Ethereum?
On its face value, Ethereum looks very much like a digital currency to hold as a long-term investment. The story above is a good motivation. However, it is important to state that cryptocurrencies are generally volatile. No one can be sure of what will happen to Ether ten years from now.
There is a good chance that the price of Ether can significantly rise in the next ten years that a little investment now can make you a millionaire. There is also a chance that the coin will become much less valuable, leading to loss. But from all indications, Ether is most likely to go up in value.
It is also important to state that the nature of the cryptocurrency market makes long-term investment risky. Government policies and regulations, as well as the activities of hackers and cybercriminals, can compromise a cryptocurrency investment.
To answer the question fairly, Ethereum looks ideal for long-term investment. Historically, it has performed great, and there are signs that things will keep getting better for the software and its native digital coin. Even the other cryptocurrencies being created on the Ethereum platform are performing really well too.
Check Out: What Will Ethereum Be Worth In 10 Years?
Simple Illustration: If You Invested $100 in Ethereum Five Years Ago
To further illustrate what long-term investment in Ethereum can mean to you, let us assume that you invested in Ethereum in the early days. The Ether coin became available on July 30, July 2015. Let's say you waited till December of the same year to invest in the coin. Let’s also assume you invested $10,000, you will get 1162.79 units at $0.86 approximately.
Let’s also assume that you ignored the ETH rush of 2018 that saw the coin reach 1,432.88, then you will be a millionaire at this point. Yes, a $10,000 investment in Ethereum five years ago will be worth more than $25 million at the moment.
Important Tips for Investing In Ethereum for the Long-Term
From what we’ve covered so far, it is tempting to conclude that making a long-term investment in Ethereum is an excellent decision, but there are important factors you must consider before making any investment. Here are a few important tips to keep in mind if you decide to play the long-term goal with Ethereum.
1. Do Not Invest Your Life-Savings
Making investments is the best way to build wealth, but you must always account for risks. Though it has worked for some individuals in the past, investing your life-saving is unwise. Smart investors have investment limits.
You should also consider the fact that Ethereum is a cryptocurrency and, therefore, volatile. Putting your lifesaving into a cryptocurrency may reward you in ten years’ time, but it is not the smartest move you can make as a crypto investor.
2. You Don’t Necessarily Have To Wait For Ten Years
Patience is a virtue in investment, but it can also be a problem in some instances. You don't really have to put your money into Ethereum and go to sleep to wake up a millionaire in ten years. It is better to stay informed and ready to take advantage of other opportunities.
From the story we shared earlier, you can tell that HODling Ethereum for just three years can be highly rewarded. You can decide to cash in on your investment anytime you feel it is ripe. You should also watch out for signs of trouble and decide the right time to cash in.
3. Never Stop Learning
To succeed in online trading, you must embrace continuous education. The market is changing all the time and only the informed individual can make the right decision at critical times.
Keep learning about Ethereum, other cryptocurrencies, and blockchain technology. You don’t have to become an expert, but you need to know what is happening and make decisions based on correct information.
Invest the Smart Way
It is easy to look back and wish you’d made investments in the cryptocurrency market years ago. However, it is important to realize that it is not yet late to get in and make a fortune by making the right decisions.
As we’ve already stated here, continuous education in trading is key to making the right decisions in the crypto world and generally the world of finance and investing.
You should also know when to get help. It is almost impossible to succeed in online trading without help. Find professional help when you need it.
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Virtual currencies are highly volatile. Your capital is at risk.
Are you still not too sure whether a long-term investment in Ethereum should be the right move for you?