The cryptocurrency's supporters are hoping this is just the beginning of a long-running bull market.
After tanking 68% in 2022, Ethereum (ETH 1.16%) experienced a resurgence last year, as the digital asset soared 91% in 2023. This was on the back of renewed optimism in the crypto industry.
However, Ethereum remains 49% off its all-time high. And the current dip might be a rare opportunity.
Should investors buy this leading cryptocurrency while it's still below $2,500? Let's look at both the bull and bear cases for Ethereum, so that investors can make an informed decision.
What the bulls are saying
Ethereum was the first cryptocurrency that incorporated functionality for smart contracts. And this means that it had greater potential to introduce various use cases.
This includes decentralized applications, in verticals including gaming, social, governance, and even art. But one area that has huge potential is decentralized finance (DeFi). According to coinmarketcap.com, Ethereum has 71% of the $105 billion of total value locked in the entire cryptocurrency industry. This metric measures how much capital is staked or locked up in DeFi applications, indicating Ethereum's dominance.
In September 2022, Ethereum's network transitioned to a proof-of-stake consensus mechanism. Supporters had long waited for this upgrade, called The Merge, to make the cryptocurrency better capable of scaling up. This also reduced its energy usage by 99.95%. Furthermore, the hope is that Ethereum can process more transactions at lower costs. And this should continue to make this blockchain network a hotbed when it comes to developer activity.
Another reason why Ethereum might be on your investing radar has to do with the potential for spot exchange-traded funds (ETFs) to hit the market. The Securities and Exchange Commission approved Bitcoin spot ETFs recently, and there's optimism this could happen with Ethereum as well. So far, BlackRock and Ark Invest, among other asset managers, have filed applications. This could bring in massive amounts of institutional capital to Ethereum, which could support a higher price over time.
The bears have compelling arguments
The entire premise of cryptocurrencies is to take power away from central authorities and give it to the community. The goal is to create decentralized networks where individuals are in control. The issue with Ethereum, though, is that it's still controlled by a small group of people. Vitalik Buterin, co-founder of Ethereum, has an outsize influence on the direction of the crypto. Some might view this as a huge risk because he can take actions that are more favorable to himself.
Besides The Merge, Ethereum's leaders have a comprehensive roadmap that includes numerous other upgrades to the network, called the Surge, Verge, Purge, and Splurge. While this is encouraging, because it shows how well thought out Ethereum's development pipeline is, it adds tremendous technical risk. Anytime software is changed, a lot can go wrong, thus opening up Ethereum to software bugs that could make it easier for hackers to attack the network and steal people's private keys.
Investors also can't ignore regulatory concerns. SEC chair Gary Gensler has come out and said before that he views Bitcoin as a commodity, while all other cryptocurrencies are likely securities. This means Ethereum could face a more stringent regulatory framework going forward, which could discourage capital and talent from migrating to it.
Should you buy Ethereum? It depends.
Both the bull and bear cases hold a lot of weight. Investors should consider the facts and come to their own conclusion about what to do with this cryptocurrency as it relates to their portfolio composition. Everyone has a different perspective.
If you're willing to take the risk, accept the uncertainty, and understand that there will be lots of volatility, then initiating a tiny position in Ethereum while it's still below $2,500 might make sense. Of course, it's critical to maintain a long-term mindset of at least five to 10 years if you go this route.
Neil Patel has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
FAQs
Everyone has a different perspective. If you're willing to take the risk, accept the uncertainty, and understand that there will be lots of volatility, then initiating a tiny position in Ethereum while it's still below $2,500 might make sense.
Is Ethereum a good investment in Motley Fool? ›
Ethereum has been one of the best-performing crypto investments of the past decade. It faces enormous pressure to maintain its rate of growth, especially given the arrival of so many new challengers. The new spot Ethereum ETFs will likely provide a boost, but the size and extent of that boost is very much in question.
What does the Motley Fool recommend for crypto? ›
1. Coinbase Global. Coinbase Global (COIN -3.95%), a top cryptocurrency trading exchange, made its initial public offering (IPO) in April 2021. The company is a popular platform for purchasing major cryptocurrencies such as Bitcoin, Ethereum, and Cardano (ADA -0.39%), allowing users to trade more than 250 altcoins.
Is it wise to buy Ethereum now? ›
Yes, our verdict is that Ethereum is a good investment. As the crypto market expands, there will likely be a sharp increase in the number of applications built upon the Ethereum network. This will naturally result in significantly boosted demand for the ETH token, in turn pumping the token's price.
Will Ethereum reach $3,000 again? ›
That being said, it is a 100% return from current levels and, therefore, will be a difficult target to hit. The Digital Coin Price Ethereum forecast calls for the market to be relatively flat through most of 2023 but does have an Ethereum Price Prediction of higher levels in 2024, breaking the $3000 level.
How much will 1 Ethereum be worth in 2030? ›
Ethereum (ETH) Price Prediction 2024-2040
| Year | Minimum Price | Maximum Price |
|---|
| 2030 | $38,664.13 | $47,066.29 |
| 2031 | $56,588.34 | $67,571.24 |
| 2032 | $87,586.24 | $98,973.10 |
| 2033 | $126,956.30 | $150,114.99 |
8 more rowsThe continuous growth of Ethereum and its constant upgrades has led many to predict that this year 2024 and upcoming years will be great for the token as rising confidence in the technology and blockchain solutions will surely let ETH to the moon and investors holding ETH for long will not be wrecked.
What are the 10 stocks The Motley Fool recommends? ›
See the 10 stocks »
Mark Roussin, CPA has positions in AbbVie, Alphabet, Coca-Cola, Microsoft, Prologis, and Visa. The Motley Fool has positions in and recommends Alphabet, Chevron, Home Depot, Microsoft, NextEra Energy, Prologis, and Visa.
What is the ultimate portfolio Motley Fool? ›
The Ultimate Portfolio for 2022 is a model portfolio built from stocks recommended in Stock Advisor and Rule Breakers, and works as an example for how you can better manage your risk through diversification without sacrificing your return potential.
What is the most promising crypto under a dollar? ›
Best Crypto Under A Dollar: Detailed Reviews
- OppaCoin – The Meme Coin Merging K-Culture with Cutting-Edge AI. ...
- BlastUP – Red-hot Crypto With Multiple Potential Upsides. ...
- Shiba Inu – Dogecoin Alternative With Utility Across the Ecosystem. ...
- Cardano – Utility Token With Fast Transactions and Increasing Use Cases.
The short term can be rocky for crypto, and if you'd invested in late 2021 right before prices plummeted, your investment would have declined in value. But if you'd invested just four years ago and held through all the ups and downs, you'd have nearly 8 times your initial investment by today.
Can Ethereum reach $50,000? ›
Can ethereum reach $50,000? Ethereum prices could surpass $50,000 by 2030 in a best-case scenario, according to VanEck.
How much will Ethereum be worth in 2025? ›
What will Ethereum be worth in 2025? According to our Ethereum forecast for 2025, Ethereum's price will average around $7,600 in 2025. The forecast also estimates potential highs of $10,700 and lows of $4,500.
Will Ethereum reach $100,000? ›
Crypto markets aren't ready for such a stretched valuation. Ethereum's chart doesn't support moving to $100k in the coming years. While ETH to $100,000 might happen at a certain point in time, it won't happen before 2030, is what we confidently can say. Here is a path to $10,000 though.
Should I buy Ethereum or Bitcoin? ›
Buying either crypto requires a high risk tolerance. Looking at past performance, it's difficult to choose a winner between Bitcoin and Ether because their relative returns fluctuate depending on the time frame. In the past year, Bitcoin prices are up 157% compared to a 100% gain for Ether.
Will Ethereum go to 10k? ›
ETH may rise to $4,800 by July 2024, drop to its Fibonacci level $2,560 by October 2024. In doing so, it will create a bullish cup and handle, a buy opportunity before ETH takes off in 2025. InvestingHaven's ETH price forecast 2025: $5,000 to $10,000.
What is the best stock to own with the Motley Fool? ›
The Motley Fool has positions in and recommends Amazon, JPMorgan Chase, Shopify, and Walmart.
Can Ethereum reach 100k? ›
Ethereum's chart doesn't support moving to $100k in the coming years. While ETH to $100,000 might happen at a certain point in time, it won't happen before 2030, is what we confidently can say. Here is a path to $10,000 though.
Can you be a millionaire with Ethereum? ›
At the hypothetical price of $164,000 per token, holding six ETH would equate to a value of just under $1 million. In comparison, the current price for six ETHs is roughly $21,000.
Which crypto will explode in 2024? ›
Our list of the next big crypto coins to explode in 2024 (x100 Bull Run) : EarthMeta ($EMT) – AI-driven Metaverse platform for decentralized governance and digital real estate. Folki ($FOLKI) – Meme coin integrating with the metaverse.
