Buying and selling digital assets is easier than ever, but deciding on the right cryptocurrency to invest in is getting harder by the day. Sure, if you have the necessary funds, you can easily buy Ethereum with a debit card or any other crypto that is available at the moment, and add it to your portfolio in just a few simple steps, but that is closer to gambling than investing, so it’s not the smartest thing to do if you want to minimize risks and make a profit.
When it comes to crypto investing, there are many variables that come into play and numerous aspects you need to consider that inevitably make the decision process quite challenging. For starters, the number of crypto projects has increased tremendously over the years, jumping from only 500 back in 2015 to nearly 9,000 in 2023. The fact that most of these coins have little significance and it is estimated that the top 20 cryptocurrencies make up almost 90% of the total market makes it easier to narrow down your options. But you still have to research a variety of different coins and keep an eye out for emerging projects if you want to make a well-informed decision, which can be nerve-wracking and time-consuming, especially if your tech knowledge is limited.
Then there’s the well-known market volatility adding another layer of complexity to the process. As a newly emerged asset class, digital currencies are still in their infancy and a lot more volatile and unstable than traditional assets, making them more prone to sharp rises and falls. To make matters even more difficult, we’re now going through a new crypto winter which has caused prices to drop and freeze unexpectedly, following a series of scandals, bankruptcies and other turbulent events in the crypto space.
The point is, figuring out which cryptocurrency makes a better investment option is no easy feat. However, you’re not alone in your struggles. Financial experts and analysts have also been doing the work, researching and comparing different crypto projects so they can determine their investment potential. And after much analysis and consideration, they’ve come to the conclusion that Ethereum offers some of the best investment prospects. But since you shouldn’t trust anyone blindly, expert or not, here are the arguments they bring in this respect.
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Track record
Digital assets have a very short history behind them, being invented almost one decade and a half ago, so they don’t have a long track record that could help us assess their reliability, as other conventional assets do. However, some coins have been in the game longer than others and that can give us an idea of how strong and resilient they might be in the long run.
Analyzing things from this perspective, Ethereum is without a doubt one of the most powerful crypto projects out there, both because it’s one of the oldest cryptos in the market and because it has managed to withstand all the bull and bear runs without losing its position as the second-largest crypto.
Ethereum’s white paper was published in 2013, and the project was officially launched in 2015, reaching the top five in just one year after its release. Since then, Ethereum’s price has fluctuated a lot, with values going up and down as the market went through its usual cycles of rise and decline. But the fact remains that Ethereum has established itself as a trusted and reliable project, giving it a huge advantage over other cryptocurrencies.
Updates
Like all cryptos out there, Ethereum also has its flaws. The crypto was heavily criticized for the massive amounts of energy that were consumed during the mining process. Then scalability issues were brought into discussing, highlighting the high cost of transactions and the slow processing speed of the network. But unlike other crypto projects where developer activity has slowed down and progress has stagnated, Ethereum continues to address its shortcomings and improve its performance through ongoing updates and upgrades to its network.
Probably the most relevant example in this respect is the Merge, Ethereum’s biggest upgrade which saw the platform switch from the original proof-of-work consensus to a proof-of-stake model, and thus cut its energy consumption by 99%. Further updates and solutions are now being implemented or in the works aiming to address scalability issues and other areas that require upgrading. Therefore, Ethereum offers the promise of continuous improvement and innovation, which is a huge selling point in a market that’s rapidly growing and evolving.
Use cases
Technically speaking, Ethereum is not a coin, but a decentralized blockchain-based platform that can be used to conduct transactions and build all sorts of applications. It’s the platform’s native coin, Ether (ETH) that serves as an investment venue and powers all transactions and computational services that take place on the network, but people use the two terms interchangeably.
However, it’s important to make a distinction between the two, in order to highlight Ethereum’s numerous use cases. Unlike other cryptos that only serve as a payment or investment vehicle, Ethereum’s use cases go beyond crypto. The platform’s smart contract functionality allows it to be used for the development and execution of a wide variety of applications that can power innovation across all industries. This means Ethereum has real-world utility and a growing number of people rely on its capabilities, making it more likely for the platform, and implicitly its native coin Ether, to thrive in the long run.
Final thoughts
Ethereum is by no means a surefire investment venue. One should not ignore the fact that investing in Ethereum or any other digital asset carries substantial risk. However, if you take a look at Ethereum’s strong and weak points and compare them with other cryptos, it becomes clear that this ambitious crypto project has a lot going for it. So, if you’re planning on investing in crypto in 2023, Ethereum is definitely an option worth considering.
