The cryptocurrency market continues the bearish trend that started earlier in the year. So is Ethereum (ETH) a good cryptocurrency to buy now? This is a legitimate question, given that the world economy is expected to enter recession in 2023. In addition, as we have announced as Kriptokoin.com, it is spoken that the Central Bank will increase the interest rates up to 100 basis points.
Is Ethereum worth investing now?
As Ethereum is the second largest blockchain platform, many crypto experts believe that ETH is a good investment compared to other cryptos. One of the factors that will affect investing in ETH in 2022 is Ethereum 2.0. Ethereum 2.0 focuses on energy efficiency and staking rather than mining. Note that proof of stake includes active transaction verification and network support by keeping funds in a crypto wallet to ensure security. Another reason for investment is the increased use of blockchain technology. This technology can facilitate online payments, credit distribution and commodity trading.
Since its launch in 2015, ETH has given its investors a high return of 284,861.87%. However, market dynamics are constantly changing and the market situation between 2015 and 2017 is somewhat different than it is today. At that time, retail money was the main driver of the market. Today, institutional money is taking on an even more important role in the market, and there are many regulations. With all these changes, it’s natural to wonder if ETH is a good investment today. Let’s take an in-depth look at the advantages and disadvantages of buying ETH. To begin with, below are 8 reasons why Ethereum is a cryptocurrency worth investing in now.
Advantages of investing in Ethereum:
1-Ethereum has real-world use
There are many cryptocurrencies that have no real use besides speculative trading. In fact, a large number of altcoins fall into this category. Ethereum is one of the most popular cryptocurrencies with high utility. Ethereum use cases range from DeFi to NFTs. In terms of context, all of the best DeFi cryptocurrencies on the market today are Ethereum-based. Similarly, all top NFT cryptocurrencies like ApeCoin, Decentraland and Axie Infinity are based on Ethereum.
Ethereum’s dominance in various crypto use cases has two advantages. The first is that the demand for ETH tokens will increase into the future. Second, investors seeking a mix of value growth and some stability elements will increasingly see Ethereum as a smart cryptocurrency investment. The result could be an increase in ETH value as broader market factors become favorable to the cryptocurrency market.
2-Ethereum is now more environmentally friendly
Environmental issues have become a major concern for investors in all markets. Because the world is warming and it is everyone’s responsibility to leave a livable planet to future generations. Therefore, cryptocurrencies with a low environmental footprint are becoming more attractive, especially for institutional investors. Ethereum has made significant strides by switching from the Proof-of-Work algorithm to the Proof-of-Stake algorithm. The transition started in 2020 and was completed last month. Ethereum’s carbon footprint will now be less than before.
This transition makes Ethereum attractive to institutional investors, who mostly have a social responsibility towards their backers. This could see the demand for Ethereum increase. However, it could make it a high-potential cryptocurrency to invest in.
3-Ethereum is censorship resistant
There has been an increase in censorship-related issues on the Internet lately. Big tech companies have a lot of power. This way, they can determine what is being said or not on their platform. ETH comes as a solution to the censorship problem and at this point it is very important. Ethereum is censorship resistant as it does not have a central control point. This means that no one can shut down Ethereum; By extension, data stored on Ethereum cannot be stopped, even by the government.
This factor could see more Dapps being launched on the Ethereum blockchain going into the future. This increased demand will likely translate into a higher price as Dapps require ETH tokens to launch on Ethereum. This is why ETH stands out as a fairly low value crypto today. The price is low, but the potential demand is high.
4-Ethereum has the potential to redefine the internet
The internet has changed the world. Billions of people are connected to the internet today, and trillion-dollar companies have their origins in the internet age. Now imagine Ethereum changing the world as it is today and becoming a world computer. Since its launch, ETH has enjoyed a surge in popularity as a launch platform for decentralized apps. This use case continues to grow and is used today as a launchpad for all kinds of smart contracts. ETH is used to digitize various assets in a decentralized environment.
As this adoption grows, so does the growth in Ethereum’s popularity. This places Ethereum in a unique position to become the world’s largest and most important decentralized computer, effectively reshaping the internet. Over time, multi-billion dollar decentralized organizations with global influence will work on Ethereum, which is a big deal in terms of potential value growth of ETH. While adoption is still in its infancy, making Ethereum a smart cryptocurrency investment today.
5-Real local government proves to be an asset
Ethereum is one of the most decentralized cryptocurrencies on the market. So why is Ethereum decentralization important? In the last few years, it hasn’t been that important. Most of the top-performing cryptocurrencies in the 2020/21 bull run were heavily centralized. Similarly, many top-performing ETH alternatives often have an element of centralization.
But things are changing and investors are starting to realize that decentralization can be one of the most important assets you can trust in this market. The collapse of Terra, a $40 billion project, supported this. The fact that Celsius and a few other cryptocurrency platforms have moved to limit withdrawals has also made it clear the importance of decentralization. The power of decentralization makes Ethereum a highly undervalued cryptocurrency at current prices.
6-Ethereum tokenomics is changing
Since the hard fork in August 2021, Ethereum has experienced a major change in tokenomics. Unlike in the past, the more ETH is adopted, the more ETH is burned. This was the reason why Ethereum rose from around $1,000 in August 2021 to $4800 by December 2021. Going into the future, further adoption of Ethereum is likely. With potentially growth aspects of the market such as DeFi and NFTs, Ethereum’s burn rate will accelerate. As a result, the price of Ethereum could rise exponentially as demand outpaces supply going into the future.
7-Ethereum manages the competition very well
The Ethereum blockchain has faced a lot of competition since 2017. This was followed by the rise of many ETH killers trying to dethrone Ethereum from its position as the number one Dapps platform. However, none of these competitors has managed to dethrone Ethereum from its top position in the last 5 years. This has a lot to do with the fact that many are focused on scalability and transaction fees at the expense of decentralization. It will likely see Ethereum consolidate its position as the number one Dapps platform in the market. This gives an edge in terms of adopting Ethereum.
8-Ethereum is available on most exchanges
ETH is one of the few cryptocurrencies listed on all exchanges large and small. This is an advantage for Ethereum as it will always be a liquid asset that investors can enter and exit at any time. In a market as high-risk as cryptocurrencies, this is a huge plus. This is because traders know that they can easily buy and sell based on current market conditions.
Disadvantages of investing in Ethereum
While ETH is one of the best cryptocurrency investments with huge potential, it is not without its problems. There is also a possibility that Ethereum will underperform or fail the market. Although ETH maintains its position as the number one Dapps platform in the market, the number of competitors is growing. Some of the newer ones perform quite well on key metrics like security and decentralization. This means that there is a risk that Ethereum will see a decline in market share over time. The same could be reflected in price in the form of underperforming ETH from the broader market.
Besides, cryptocurrencies are always at risk from bad actors. Ethereum has had its share of malicious attacks. For example, in 2016 it was hacked and the Ethereum DAO lost $70 million. However, the community took action to restore the funds via a hard fork. More recently, a 7-block refactoring of the Ethereum blockchain has posed a threat.
Is it too late to buy Ethereum?
Many crypto market analysts seem quite optimistic about ETH. There is also a general consensus that its value will increase in the near future. However, there is no clear consensus on how high Ethereum can reach. If that’s the case, buying now might be ideal and you could even call it ‘cheap’.
Does Ethereum have a future?
There is no critical reason to suggest that Ethereum will not last until the next 10 years. However, there are technical risks worth mentioning. The biggest one is that Ethereum has no limit on the total number of tokens that can be made. Therefore, it has an inflationary nature. This means that if a large number of ETH tokens are thrown into the market, the value of the assets held by everyone decreases.
How secure is Ethereum?
ETH is largely safe. Like almost all cryptocurrencies, Ethereum uses blockchain technology to protect itself against attackers. As Ethereum’s network continues to grow, having more nodes makes it harder for attackers to manipulate it. This will make it more secure. This is because the combined computing power of all nodes in the network would be very difficult for attackers to overcome. Note that most attacks where ETH is stolen take place on cryptocurrency exchanges, not on the Ethereum blockchain.
Conclusion: Is ETH a Good Investment?
The price of an ETH token was $25 in 2017 and reached $3,409 in early 2022. So, if you had invested $100 in Ethereum in 2017, you would have about $100,000 in Ethereum by now. So is Ethereum worth buying? Currently, Ethereum is definitely considered a good investment. And if you want to invest in it, now is probably a good time to do so. It is very important to understand what you need to know before investing in Ethereum. In the end, the final decision falls to you. What kind of investor do you want to be? Find the answer to this question and you will definitely know if Ethereum is a good investment!
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