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Ethereum Overview: is Ethereum a Good Investment?

We will provide an in-depth overview of Ethereum, its mechanics, and the future development of the platform.

Since Ethereum is the #2 cryptocurrency by market cap, many ask themselves whether it still has upside potential considering the current bearish sentiment in the markets. History has taught us that the high volatility of cryptocurrencies can turn the tide at any time.

This article will provide an in-depth overview of Ethereum, its mechanics, and the future development of the platform. We will also touch upon its historical price action to see whether ETH can still come out as a winner once this bear market ends. Additionally, we will explore some price predictions for ETH provided by reliable sources.

All of this should give a good basis of knowledge on whether you should proceed with an ETH to BTC exchange or stick to Ethereum as your main portfolio driver.

Overview of Ethereum

Ethereum came out in 2014, nearly six years after Bitcoin. It managed to revolutionize the blockchain industry like no alternative cryptocurrency before it. Until its appearance, blockchains had a single-use case — to be used as a vehicle for online payment. Or, like in Bitcoin’s case, the goal was to serve as a store of value.

Ethereum introduced the concept of smart contracts. It allowed developers to deploy decentralized applications on its network of computers. It brought the incredible benefits of blockchain technology such as decentralization, tokenization, immutability, and security to software development.

The Ethereum Virtual Machine (EVM) is at the core of the network. It allows the creation of decentralized software, exponentially increasing the use cases of blockchain tech. This gave birth to new financial archetypes through decentralized finance (DeFi), NFTs, and blockchain games. Moreover, it allowed blockchain to be plugged into many high-tech industries such as healthcare, supply chain, and decentralized identity.

Ethereum currently runs on a proof-of-work consensus mechanism, which many believe to be wasteful from an environmental standpoint. However, the network is switching to a proof-of-stake consensus in August 2022, which should reduce its carbon output by 99%. PoS should also make the network more scalable and provide faster transaction execution and increase the throughput of Ethereum.

ETH: Why So Expensive?

Ether (ETH) is the native crypto of the Ethereum network and is used to pay for the transaction fees on the network when interacting with smart contracts or sending assets. As the demand for Ethereum increases in the developer community, the demand for ETH equally increases, which, in turn, increases its price.

ETH appeared on the markets in 2015 at a modest price of around $0.75 per token. During the bull run in 2017-2018, the price reached as high as $1,300 and was one of the major catalysts of the ICO bubble in that period. During the subsequent bear market, ETH fell as low as $80 in 2018.

Following the COVID19 crash, ETH entered a bullish market that pushed prices higher than ever. In 2021, ETH went from $730 to a new all-time high of $4,800, which it reached in November 2021.

The current bear market hasn’t been too kind to ETH, however. In June 2022, prices went down to 3 digits, and now ETH is trading at around $1,100 per token. This equates to an almost 80% retracement from its top price.

ETH: Statistical Predictions

Nevertheless, experts from the crypto sphere remain optimistic about the growth of Ethereum.

  • Digitalcoinprice is quite cautious with its prediction and hopes to see Ethereum back to $2,070 by 2025.
  • net is much more bullish, with a forecast of $8,900 per ETH by the end of 2025.
  • Similarly, Walletinvestor goes as far as providing a target of $9,800 for their five-year forecast.
  • Finally, Tradingbeasts provides a target of $2,500, falling in line with their peers from Digitalcoinprice.
Should I Purchase ETH Now?

Ethereum is back around the $1,000 mark, which could be a good level to start averaging in. Bear markets are cyclical in nature, and the prices will eventually stabilize and start recovering. If you purchase 10 ETH at $1,100 now and the price eventually returns to its ATH of $4,800 by 2025, your $11,000 investment would be worth $48,000, providing a net profit of $37,000 in three years’ time.

Keep in mind that prices still might go lower, so using dollar-cost averaging when buying on might be the best strategy in the long term.

All in all, despite the current bear market, there are thousands of projects running on Ethereum. This ensures the platform will keep growing and its price might eventually go back to the previous levels.


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