Is Ethereum A Good Investment? Buying ETH in 2024 | LiteFinance (2024)

It has been a kind of fashionable in the crypto industry to invest in Ethereum. The crypto market is strongly volatile and unstable. Even digital assets with multi-billion dollar market capitalization cannot be called reliable. If the coin has generated passive income before, before investing in it again, you need to familiarize yourself with macroeconomic indicators and research the market. You should also study how the blockchain has changed and what plans the Ethereum team has for the near future.

This article will analyze the relevance of buying the Ethereum in 2024. We shall start with the history of Ethereum, the second largest cryptocurrency in the world, and cover operating algorithms and development plans that will help reveal the financial future of the coin. We shall also consider the ways to use ETH, purchase and exchange it, features of market development, as well as factors that may affect its liquidity in the future.

History of Ethereum (ETH)

As an idea, Ethereum was introduced by a young Canadian developer, Vitalik Buterin, at the end of 2013. The ETH blockchain itself was released on July 30, 2015, after raising funds in 2014.

In 2016, the famous scam of the DAO, one of the first decentralized autonomous organizations, occurred. As a result of the hacker attack, about $50 million was stolen. To protect the funds of the blockchain users, Vitalik took an unprecedented and controversial step - direct intervention in the Ethereum blockchain to cancel hacker operations.

The decision was received ambiguously by the cryptocurrency community. A group of enthusiasts decided to support the original blockchain, which later became known as Ethereum Classic (ETC). The new branch under Vitalik’s command retained the name Ethereum (ETH).

What Are The Ethereum Use Cases?

The Ethereum blockchain is the largest in the cryptocurrency market, not counting Bitcoin. The popularity of the network is explained by its reliability. The high decentralization of the Ethereum network, on the one hand, does not allow one to gain control over the entire blockchain, significantly harm the project, or disable it. On the other hand, it expands the possibilities of its use.

Ethereum in DeFi

DeFi is an open, global decentralized finance system created as an alternative to the traditional finance system, in which all funds are controlled by banks and government agencies. Most of the existing DeFi services and protocols operate on the ETH smart contract blockchain, ensuring its high demand. Among the most notable projects are Compound, Bancor, and MakerDAO.

Decentralized products allow you to pay, receive payment for services, borrow, and invest. That is, participants already receive all the tools for conducting financial activities today. But most importantly, the DeFi infrastructure is experiencing exponential growth. And if the total volume of cryptocurrency transactions through DeFi is now estimated at tens of billions of dollars, in just five years, it could exceed 100 billion.

Ethereum in NFTs

Ethereum is the dominant blockchain in another promising market. We are talking about NFTs, which, starting in 2020, have been developing rapidly.

I don’t mean sensational JPG images on the blockchain, I am writing about full-fledged decentralized software that will be stored in NFTs as in a box.

Many experts believe that NFT, the non-fungible token, will become an inseparable element of the upcoming global trend of asset tokenization and associate it with positive forecasts for the price of Ethereum. At the same time, the first NFT programs are already being implemented for the gaming industry. Buying and selling NFTs as part of the gameplay will become a reliable guide for young users to the World of Cryptocurrency, and one of the main beneficiaries of this trend will be ETH, as the leader in the market of infrastructure for DApp and smart contracts.

Ethereum Uses Cases in The Payments Sphere

Ethereum social trading is gaining momentum. In this regard, it easily competes with Bitcoin. Almost all sites and services that accept cryptocurrency payments support both digital coins.

Such recognition of the Ethereum results from:

• high network reliability;

• support for every existing hot wallet;

• the ability to purchase ETH on any cryptocurrency exchange;

• decentralization, excluding control from supervisory authorities.

A complete transition to Ethereum 2.0 will likely speed up adoption even further. The second version is already running on the test network. The blockchain update is aimed at increasing transaction speeds and reducing energy consumption. This means that holders will be able to make payments faster and pay less for gas, the digital energy, that is, for placing a transaction in a block. In other words, buying Ethereum and paying with it will become even more convenient.

Ethereum Fundamental Analysis

The fundamental analysis of Ethereum, like any cryptocurrency, involves examining various factors that can influence the price and its long-term prospects. Below is a checklist of factors for conducting a fundamental analysis of Ethereum.

Technological Updates and Developments

Monitor updates, such as the transition to Ethereum 2.0 or the introduction of new features. They are aimed at improving network performance and security, which, in the long term, will increase investor confidence and the demand for the cryptocurrency.

Variety of Applications

The more applications and projects are built on the Ethereum blockchain, the higher the demand for this cryptocurrency. The emergence of DeFi and NFT-based projects once greatly influenced the price of ETH.

Changes in Legislative Regulation

Any news about cryptocurrency regulation in major countries may affect the price of Ethereum. For example, a ban or restriction on Ethereum could cause the price to drop.

Competition

Watch for the development of other smart contract-enabled blockchain platforms and Ethereum alternatives. Competitors such as BNB Chain or Polygon are superior to Ethereum in some ways. They are growing their user base at a steady pace, including through users of the Ether blockchain.

Macroeconomic Indicators

Economic and geopolitical crises, high inflation, unemployment. These and other macroeconomic factors affect investor sentiment and lead to instability not only in the stock market but also in cryptocurrencies.

Active, Engaged Community

The undoubted advantage of Ethereum is its developed and large community. Open Source solutions and libraries of ready-made scripts allow you to develop a product quickly. Expert forums or public chats with experienced programmers become a determining factor when choosing a platform for developing your own smart contract.

Safety Problems

Just a few years ago, any news about another hack of the project and the theft of several million USD could greatly affect the Ethereum rate. Now, the market participants do not react so dramatically, but precedents when the bankruptcy of projects affects the market still arise. The latest example is the bankruptcy of the notorious FTX exchange.

Trading Volume

A high trading volume may indicate interest in Ethereum among traders and investors, while a low volume may signal low demand.

Correlation with the Stock Market and Bitcoin

Bitcoin, like the SPX index, as the main dominant in the market, reflects the average state of the market. If Ethereum moves against the main benchmark, this is a signal that there are internal factors, such as large insiders, influencing the price movement.

In Ethereum fundamental analysis, the above factors should be considered and assessed relative to the overall market trends and sentiment.

Ethereum Technical Analysis

Ethereum technical analysis, like technical analysis of any other trading asset pair, involves studying price charts to predict future price movements. Here are some tools that can be used in the technical analysis of Ethereum.

Price Charts

Price charts are the basis of technical analysis. The most common ones are line charts, candlestick graphs, and bar ones. More exotic versions of charts are Heiken Ashi, Kagi, and Renko. Each type has its pros and cons that require deep and detailed study.

Trends

Ethereum can confidently be called a trend trading instrument. This is especially well reflected in longer timeframes in a major pair with the US dollar. Determining the current trend is the basis of technical analysis. At least 50% of the success of the exchange rate forecast depends on the correct definition of the market direction.

Support and Resistance Levels

These are horizontal lines that indicate the levels at which the Ethereum price tends to stall or bounce. They serve to develop a cryptocurrency trading strategy and draw up a trading plan.

Trading Channel

Its fundamental difference from support and resistance levels is that the channel can be inclined. This tool is especially important for traders with high-frequency strategies who prefer trading within a channel.

Fibonacci Levels

In practice, Fibonacci levels are almost always used when projecting future prices using technical analysis. Following a significant price movement, the market will most likely experience a correction to levels that are a certain percentage of the main trend. These levels are often expressed as percentages such as 23.6%, 38.2%, 50%, 61.8% and 100%. The trader assumes that market participants will react to these values as support or resistance levels and builds a trading plan by determining entry and exit points for the trade.

Technical Indicators

Technical indicators are additional add-ons to the price chart. They help determine market movement patterns, trends, key levels, transaction opening and closing points, and dozens of other parameters.

There are tens of thousands of technical indicators. No one can name the exact number, but they can all be divided into three groups:

• Trend indicators that define the current ETH price direction, sharp change points, and market collapse from a historical perspective;

• Stochastics and oscillators show possible price pivot points and trend reversals, defining the most profitable entry and exit points;

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• Volume indicators include classic indicators of trading volume, market profile indicators, and cluster analysis.

Price Chart Patterns

This category includes many price analysis tools and even entire theories. The most popular of them are:

• Classical chart analysis;

• Japanese candlesticks and Price Action patterns;

• Elliott wave theory;

• Fractals;

• Harmonic patterns.

When performing technical analysis, it is important to remember that no tool or method is 100% accurate. To make informed decisions and invest profitably, you should use a combination of tools and your own experience.

Ethereum Sentiment Analysis

The sentiment analysis of Ethereum refers to the measurement of the overall sentiment that the market or investors feel about a particular asset. This analysis may be based on news, opinion, social media, and other public sources of information. Below are some approaches to analyzing Ethereum market sentiment.

Social Media Analysis

For example, there are many cryptocurrency traders among Twitter or Reddit users. Based on comments and publications on these social media, you can assess the market sentiment. If you go to the channel of the analyzed project in Telegram or Discord, you can understand how active the community is and what sentiment prevails in them. There are also platforms like CoinMarketCap or CoinGecko, which aggregate information on each cryptocurrency and collect user reviews.

Analysis of Media Resources and News Aggregators Relative to the Cryptocurrency Market

News about regulations, technology updates, partnerships, and other developments can greatly influence market sentiment. News creates a general tone of the agenda that influences users.

Analytical Platforms

One of the most famous platforms specializing in analyzing the cryptocurrency market is santiment.net. There is also a more accessible alternative - the greed and fear index. The most popular of them is alternative.me. Another option for market sentiment analysis is offered by litefinance.org displayed as a natively understandable scale that reflects the attitude of buyers and sellers.

Google Trends

Analyzing interest in Ethereum using Google Trends can provide insight into the popularity of the query and how interest in the cryptocurrency is changing over time.

The graph above shows the trends of the Ethereum search query over the past 5 years. It can be seen that after a prolonged calmness, the chart is starting to come to life again.

However, public opinion can be manipulated, and sentiment analysis does not always reflect the real market state. To get a more complete picture of the market, you need to combine sentiment analysis with technical and fundamental analysis.

Investing in Ethereum vs. Bitcoin

Ethereum and Bitcoin are the leaders of the cryptocurrency market. They confidently occupy the first two positions in terms of market cap.

Bitcoin and Ethereum differ in purpose. Bitcoin is the first and most famous cryptocurrency. It is called “digital gold” due to its limited supply and storage role. It was created as a replacement for real money, and Ethereum was created to help develop decentralized applications with smart contracts.

Transaction speed is another difference between Ethereum and Bitcoin. Ethereum can carry out about 15 transactions per second, while Bitcoin can only carry out seven. And with the expansion of blockchain scalability, the speed of transactions in ETH can increase even more.

A common disadvantage of Bitcoin and Ethereum is the high cost per transaction. Depending on the load on the network, it can rise to several tens of dollars. The main reason is another weak point of first-generation blockchain networks – difficulties with their scalability.

The choice between Bitcoin and Ethereum depends on the investment goals and risks that the trader is willing to take. If you need digital gold for long-term storage, Bitcoin may be preferable. If you are interested in the potential of decentralized applications and smart contracts, choose Ethereum.

Why Should I Invest In Ethereum?

Before investing in Ethereum, a trader must make sure that the investment will be worth it in the long or short term. Below, we will look at the reasons why investing in Ethereum is really worth it.

What are Smart Contracts?

The reason Ethereum became so popular that it almost knocked Bitcoin off its pedestal in 2017 was smart contracts. BTC offers a decentralized solution instead of a classic banking solution. Smart contracts offer the same solution for the autonomous operation of any program.

In other words, a smart contract is an autonomous program that operates within the blockchain and is resistant to censorship and blocking. The program code is transparent and public, which means it is more secure. Such a program does not require a separate operator, can work autonomously, and be managed in a decentralized and collaborative manner, which is the basic condition for creating a DAO.

So far, the main inhibitory factor is disagreements between regulators in different countries regarding smart contracts. The technology is significantly ahead of its time and is capable of revolutionizing areas such as property rights and intellectual rights, management, business administration, finance, investing, and game development.

Ethereum Tokenization

A few years ago, many traders wondered whether it was worth investing in Ethereum. The concept of tokenization itself and the growing list of applications for it indicate that Ethereum has enormous potential and value for investors.

Tokenization in cryptocurrency refers to the process of converting ownership of an asset into digital form, typically in the form of a cryptocurrency token or NFT.

Tokenization of shares, real estate, gold, and other multiassets is a reality, the implementation of which is still separated from us by strict control of regulatory authorities. However, even there, they seem to acknowledge that widespread adoption of this technology is inevitable.

The World Economic Forum (WEF), in its surveys and studies, predicts that up to 10% of global gross domestic product will come from blockchain technology by 2025-2027. Forum experts are clear in their assessments: 10% of the GDP of every country in the world will be associated with the digital industry.

Censorship in the Ethereum Blockchain

For many developers and users, censorship is a real problem. Thanks to decentralization, Ethereum can interact with the outside world, bypassing it. Information stored on the Ethereum blockchain (personal data, smart contracts, dApps) cannot be deleted or prohibited by the government. It is not subject to censorship as long as Ethereum is operational.

The confidentiality and security of people capable of making independent decisions is one of the reasons why Ethereum technology will always be valuable.

Ethereum Prospects

Ethereum lost 84% of its original price after the so-called cryptocurrency bubble burst in 2017 but continued to exist. Just like the Internet, which did not disappear after the Internet bubble of the 90s, Ether has gained strength and momentum.

There are amazing projects being built on top of the Ethereum blockchain: microgrids, electric vehicle charging stations, cryptocurrency collectibles, mortgages, medical records, and much more. The expansion of cryptocurrency use is far from its peak. Therefore, in the coming years, we will see many unique trading platforms built on the blockchain, as well as learn about dozens of new ways to use ETH tokens.

Societies and governments around the world are already beginning to pivot towards mass acceptance of cryptocurrencies. At the same time, you need to remember internal limiting factors, such as the high cost of transactions and the low speed of the Ethereum blockchain. After the full launch of all Ethereum 2.0 updates, this network will become an innovative hub for technologies that we could not even dream of before.

Liquidity

The Ethereum token is the most liquid investment asset in the cryptocurrency market. Despite rapidly developing competitors, this blockchain remains the main platform for decentralized applications.

The legal status of Ethereum has already been determined by the SEC. It is not officially a security, which opens up opportunities for institutional players and large companies. The high capitalization of the Ethereum ecosystem and a developed community maintain constant demand for the token and, therefore, its liquidity. On the other hand, the high liquidity of ETH makes it attractive to both investors and project founders. Thus, Ethereum maintains its leading position.

What is Ethereum Staking?

Staking (Proof of Stake, PoS) in Ethereum refers to the process of maintaining the operation of the entire Ethereum 2.0 blockchain. Instead of using computer power to mine as in the Proof of Work consensus protocol (PoW), staking participants freeze their coins and stake them to support network operations. For example, checking and adding new transactions. In return, they receive a reward. PoS is considered more environmentally friendly and less risky than PoW consensus, as it does not require the purchase, maintenance, and upgrade of expensive equipment.

To become an independent validator on the Ethereum 2.0 blockchain, you must leave a minimum of 32 ETH as collateral. You can configure and launch the validator now. If you do not have 32 ETH, which at the current rate is more than 50,000 USD, you can join one of the official staking pools and delegate your ETH. In this case, you will have to share the income with the pool, but there will be much fewer troubles since there is no need to configure, launch, and monitor the validator.

The PoS mechanism makes the ETH token a more attractive investment since the investor gets the opportunity to profit not only from the growth of the asset price but also from staking. On the other hand, the PoS mechanism fuels the demand for Ethereum and reduces the supply of the token in the market since staking requires freezing ETH for a long time.

What Are The Potential Risks of Investing in Ethereum?

Although investing in ETH is quite promising, you should still consider the possible risks before making an investment decision. Let's look at some of them.

Competition From ‘Ethereum-Killers’

Web3 is a concept for an open-access Internet built on blockchain technology. It involves high transparency of financial transactions, greater user ownership of their own data, and infrastructure management using cryptocurrency.

Systems such as Ethereum and similar blockchains, including BNB Chain, Polygon, Solana, Cardano, and ICP, are actively working on developing infrastructure for Web3 applications. The main advantage of these and dozens of other Ethereum competitors is lower transaction costs and high speed.

Investors often compare the current stage of the Web3 market with the beginning of the dot-com boom, thanks to which the whole world is familiar with Google, Facebook and Apple. At the same time, few people will remember Napster, eToys and Webvan, which could not withstand the competition. Whether Ethereum will withstand the competition or become a thing of the past is an open question.

Blockchain implies decentralization and protection from security threats and hacker attacks, but this advantage also has a downside – it is difficult to update and modernize. Because of this feature, the technological gap between next-generation blockchains and Ethereum may become insurmountable. This means that more progressive competitors have every chance to outperform Ethereum in the cryptocurrency market.

Ethereum Security Threats

Ethereum secures user assets using public private key cryptography. The reliability of the Ethereum blockchain has been proven over time, but this does not mean that it is absolutely safe. Below are the most common threats to the technical security of the Ethereum network.

51% attack

If attackers control more than 51% of the network's computing power, they will be able to take over the network to conduct double spending and block transaction confirmations. This is one of the main threats to any blockchain network. However, it is less relevant for networks with POS consensus since attackers must hold a huge amount of ETH tokens staked to perform such an attack. This means that they will lose huge amounts of money in the event of a 51% attack, which makes attacking POS blockchains economically meaningless.

Vulnerabilities in smart contracts

Smart contracts may contain errors or vulnerabilities in the code that can be exploited by attackers. An example of such a vulnerability was the DAO incident in 2016.

Phishing attacks

Hackers can create fake websites or apps that mimic real ones to steal user credentials or funds.

Man In the Middle (MITM) attack

Hackers can intercept traffic between the user and the server to gain access to sensitive information or change transactions. It is not recommended to use passwords and private keys when working in a public WiFi or an unfamiliar network.

DDoS attacks

In this case, hackers flood the network with a large number of transactions in order to block or slow down the blockchain and, accordingly, increase commission costs.

It is important to note that the listed threats, except for the 51% attack, are relevant for any Web resource. Therefore, it is very important to follow the rules of safety and digital hygiene.

High Transaction Fees

Arguably, Ethereum's biggest drawback – a high transaction fee – is preventing the network from achieving mass adoption. Using the Ethereum blockchain can cost hundreds of dollars, so retail investors with less capital are missing out on its use. While other smart contract blockchains have lower fees, Ethereum remains a poor choice. However, the current global update of the system will remove most of the problems with its scalability.

Quantum Computer Threat

Quantum computers pose a potential threat to many cryptographic systems, including those used on the Ethereum blockchain. Quantum computers can solve certain mathematical problems much faster than common computers, allowing them to break cryptographic algorithms that are considered secure today. For example, a quantum computer could hack the signature mechanisms of a blockchain network and forge transactions or steal funds.

The threat of a quantum computer is acute to any web services since current security and encryption protocols are not protected from such computing power. But there is no quantum computer at the moment that would be accessible to hackers. Besides, protocols resistant to such threats are already being actively developed.

Ways To Invest In Ethereum

There are many reasons to invest in Ethereum and many ways to increase the number of tokens in your portfolio. Below are several ways to make money buying ETH.

Buy and Hold

Buy and Hold is a reliable and simple trading strategy. But it is also somewhat risky due to the volatility in the cryptocurrency markets. Sharp price movements in cryptocurrency can work both for an investor and against him. For example, Ethereum was around $4,800 in November 2021, only to drop to $1,000 seven months later.

Significant price movements up or down are normal in the cryptocurrency market. And if you are not an active trader, the buy and hold approach is most suitable for you.

With the transition to PoS, this strategy has become even more relevant for ETH holders. Now, you can not only hold Ethereum tokens but also receive additional regular income from staking.

Liquidity Supply

The Ethereum blockchain has become fertile ground for the development of the DeFi industry. The key players here are decentralized exchanges or DEXs for short. The most famous among them are Uniswap, SushiSwap, Curve Finance, and dYdX. There are several dozen of them in total, and their number is constantly growing.

The principle of trading on DEX is not fundamentally different from that on centralized analogues (CEX). In both cases, this is an interaction between buyer and seller. The more participants on the exchange, the higher the trading volumes and liquidity of the asset.

The difference lies in how DEX and CEX solve the problem of insufficient liquidity. DEX uses autonomous market making (AMM), for which anyone can act as a liquidity provider and receive rewards. For each trading pair, DEX sets its share of the reward for supplying liquidity. You select a pair and transfer funds to AMM management, receiving regular contributions in return.

It is important to note that this is a very simplified description of how DEX and AMM work. It is strongly recommended that you review the risks associated with this investment strategy before committing to liquidity supply.

Margin Trading

Margin trading or leverage trading is a way to trade in securities and currencies even if you do not have enough assets to sell or money to invest in the assets.

For example, you want to purchase 10 coins for $1000. To do this, you need 10,000 dollars, but you only have 500 on your brokerage account. In this case, you can join margin trading and buy all 10 coins, paying for them with borrowed funds. Then, the broker will lend you the funds to make transactions against the security of your deposit.

On the one hand, this method of investing opens up the opportunity to make bigger profits. On the other hand, you must understand that you are risking your entire deposit and may lose it if the price goes against your expectations. Then, the broker will be forced to make a margin call and a stop-out, that is, forcefully close the transaction and withdraw funds from the collateral to cover the losses caused by the transaction.

When using margin trading, you also need to take into account the additional costs due to the commission the broker will charge as a fee for using borrowed funds.

Day Trading

Ethereum, like any other cryptocurrency, is a great instrument for day trading. Their volatility ensures noticeable price fluctuations, sometimes within hours or even minutes.

A distinctive feature of day trading is that positions are opened and closed within one trading day. Therefore, market analysis and subsequent trading are carried out using charts with an hourly time frame and shorter ones. This approach can hardly be called an investment approach in its pure form since the planning horizon is within 24 hours. On the other hand, it follows the same principle as the buy and hold strategy. After all, the main goal here is to make a profit by buying at a low price and then selling the asset at a higher price.

What’s Happening With Ethereum 2.0?

The cryptocurrency market is awaiting the full launch of Ethereum 2.0, a more energy-efficient, scalable, and faster version of the Ethereum network.

The blockchain behind the second largest cryptocurrency is constantly improving. The shift to Ethereum 2.0 is happening systematically, each function is tested and implemented separately. For example, The Merge has already happened - the transition from Proof of Work to Proof of Stake (PoS) consensus mechanism, which has already led to a decrease in blockchain energy consumption by 99.95%.

Another key update concerns network scalability. It's called The Surge. This is the necessary basis for launching Proto-Danksharding, an analogue of the shard chain that was originally planned. At the moment, the first version of Danksharding is already running, which, together with updates The Verge and The Purge, has made the Ethereum blockchain faster and cheaper.

Ethereum 2.0 is still to be completed. Release dates for the new update packages called Shanghai and Capella have not yet been announced. According to the roadmap, the Ethereum Foundation team plans to complete the transition to Ethereum 2.0 in 2025-2026.

For Whom Ethereum Can Be Worth Investment?

Ether can not only act as a means of payment but also has many possibilities for use as an integral part of the Ethereum blockchain. A wide range of users is formed among ETH holders, each of whom pursues their own goals. You can read more about each category of users below.

Forex Traders

Forex traders have extensive experience in trading various currency pairs. Therefore, the transition to the cryptocurrency market is unlikely to be a serious test for them. Day traders or scalpers, on the contrary, will be glad to have the opportunity to earn more since changes in the cryptocurrency market are more frequent and intense than in the traditional financial system.

Cryptocurrency Traders

The ETH has always attracted cryptocurrency traders. On the one hand, unlike 90% of altcoins, Ethereum price changes are more predictable and accurate in terms of technical analysis. On the other hand, there is quite high volatility and liquidity in the market, which are important for every trader.

Investors

Buying Ethereum can be a profitable investment even for those who are not involved in exchange trading. Experts agree that the cryptocurrency market is now heading into the next bull cycle. Time will tell if it will be as powerful as it was in 2021, but simply buying the asset could be a good investment. You can also invest in ETH to receive passive income from staking. The average income will not be as high as from successful trading, but the risks are much lower.

Web3 Developers

One of the upcoming updates as part of the transition to Ethereum 2.0 is called Ethereum WebAssembly (eWASM). It will allow programmers with knowledge of popular programming languages to take part in blockchain development. Currently, this requires using the Solidity language, which is often criticized due to its complexity.

Every developer on the Ethereum blockchain should have ETH coins to pay for gas and release smart contracts. Therefore, if you are a developer, it makes sense to invest and buy some tokens before the price increases.

Web3 Application Users

Having ETH tokens in your wallet is a prerequisite for using almost any Web3 application on Ethereum. Without it, the user can’t pay for gas and carry out a transaction on the blockchain, which greatly limits their capabilities in the Web3 space.

Should I Invest in Ethereum?

Is Ethereum a worthwhile investment? When asking this question, remember that any price forecasts that can be found in the public domain should be considered speculation. The market is very unpredictable; economic instability and rising inflation only add to the uncertainty.

On the one hand, experts admit that the price of ETH may still test the low and go below $1,000 under the pressure of external factors. On the other hand, most investors have positive expectations for the cryptocurrency market in 2024. This is primarily due to the upcoming Bitcoin halving. New updates and the transition to Ethereum 2.0 are also supporting investor demand.

If you look at the global trend, ETH is still in the bullish phase and is close to the support level. One should worry if the price chart breaks out the blue line. Still, the price remains attractive for long-term investment as of now. To reduce risks, you can split your deposit into several parts and increase your portfolio in the event of sharp price drops amid high volatility.

Analysts are optimistic about Ethereum in 2025-2026. According to various estimates, the price of ETH in 2-3 years may range from 6,400 to 13,000 USD. At the same time, you need to understand that expert estimates are based on the current market situation and can be revised at any time.

Conclusion

Ethereum is an attractive cryptocurrency investment option, primarily concerning long-term investors. High capitalization and sufficient liquidity, decentralization, and reliability ensure a stable exchange rate of the coin and its predictability. In addition to direct benefits, cryptocurrency traders can receive passive income from staking and liquidity supply, as well as invest in hundreds of dApps, NFTs, games, and other projects.

The prospects for Ethereum are still clouded only by poor scalability and high transaction costs, but developers are already working to update the network. After implementing Proto-Danksharding, the problem should be resolved. However, the developers do not report specific timeframes for the implementation of innovations. Given the current development plan, this should not take more than 2-3 years.

Price chart of ETHUSD in real time mode

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.