To put it lightly, the long crypto winter of 2022 was tough for many buyers. But those who stayed the course have made big wins so far this year.
So far this year, Ethereum (ETH -0.06%) has gone up about 52%, while Bitcoin (BTC -0.10%) has gone up about 74%. Some of the smaller cryptocurrencies have seen even bigger gains. For example, Solana (SOL 0.74%) is up a huge 141% this year.
Still, it’s important to choose the right choices. Even though prices are going up, there will probably be more volatility in the near future, and getting the wrong cryptocurrency now could cost you later.
Even though cryptocurrency is still a gamble and there’s no one-size-fits-all way to buy it, there’s one trade I’m buying a lot of in August: Ethereum.
Ethereum Continues to Be a Big Deal
Ethereum has been the best in its field for a long time, and it still is. By market cap, it’s the second-biggest cryptocurrency after Bitcoin, making up just under 20% of the whole cryptocurrency business.
Ethereum’s smart contract platform can be used for many different things. For example, it can run non-fungible token (NFT) marketplaces, decentralized finance (DeFi) apps, metaverse projects, and more.
Just because of that, it is more useful than Bitcoin, which is mostly used as a way to pay for things or protect against inflation. Ethereum has an advantage over smaller, similar networks like Solana or Cardano because of its size. It also has an advantage in the smart contract space because it is so big.
At the end of 2017, coders of Ethereum also finished The Merge. This major update turned the network into a proof-of-stake blockchain, which uses about 99% less energy. The very energy-intensive proof-of-work method is still used by Bitcoin, which could make it harder for the cryptocurrency to keep up with demand over time.
More Changes Could Make Ethereum Even Stronger
The Merge was Ethereum’s biggest change so far, but it won’t be the last. Vitalik Buterin, the founder of Ethereum, said at last year’s Ethereum Community Conference that the network is only about 40% done and that each update should make it better.
Buterin has made a plan for how Ethereum will change in the future. The next update, called “The Surge,” is expected to speed up the blockchain and lower transaction fees.
This has been a problem for Ethereum for a long time, and its slow transaction times and high fees have caused many users to switch to networks like Solana that are faster and cost less. If The Surge can solve these problems, it could do a lot for Ethereum’s long-term prospects.
There are a few more changes planned after The Surge, such as The Scourge, The Verge, The Purge, and The Splurge. The next updates probably won’t happen for a few years, but the plan is set up to deal with problems in order of how important they are to users.
Is It a Good Time to Buy Ethereum?
Ethereum is already a good investment, and each update should make it even better. But there are also risks to think about.
For one thing, the cryptocurrency industry moves at a breakneck pace, and coders make new blockchains every day. Even though Ethereum’s size and fame give it a big advantage over smaller competitors, that doesn’t mean that a new network can’t come in and steal market share, especially if any of Ethereum’s future upgrades go wrong.
Also, investing in cryptocurrency in general is still risky. Even though Ethereum has a lot of possible uses, most of what we know about its value is based on guesswork. In other words, if decentralized apps like NFTs, DeFi, the metaverse, or others become popular, Ethereum will benefit. If they don’t, it could hurt Ethereum.
There is always a chance that your investment in a coin won’t pay off. But if you’re ready to take that risk, Ethereum could be a great long-term investment for you.
Should You Spend $1,000 Now on Ethereum?
Before you think about Ethereum, you should know this.
The analysts at Motley Fool Stock Advisor just told buyers what they think are the 10 best stocks to buy right now. Ethereum wasn’t one of them.
Stock Advisor is an online service for trading that has outperformed the stock market by three times since 2002*. And they think there are 10 better stocks to buy right now.