The last time I wrote about Ethereum (CCC:ETH-USD) in mid-September, Shark Tank star Kevin O’Leary was busy slagging the cryptocurrency, saying it was too slow.
At the time, ETH was down a little bit on the month, but it was hanging in there. However, by the end of September, Ether had lost 13% of its value, its second-worst monthly performance over the past year.
Well, as I write this in the middle of October, Ethereum is up 15% from its September close, recouping all of its September losses and then some.
Despite the recent volatility, if you’ve held ETH for more than a year, there’s a lot to be thankful for when it comes to this cryptocurrency.
In the words of singer Bobby McFerrin, “Don’t worry. Be happy.”
Here’s why.
Ethereum Is Still a Strong #2
I happened to be writing about blockchain and cryptocurrency ETFs, mutual funds and trusts for another publication recently. The Bitwise 10 Crypto Index Fund (OTCMKTS:BITW) caught my attention, but not for the reason you might assume.
The fund, a Delaware statutory trust, tracks an index comprised of 10 of the most valuable cryptocurrencies. Bitcoin (CCC:BTC-USD) is the largest holding with a weighting of 64%. Ethereum is the second-most valuable representing 26% of the fund. A distant third is Cardano (CCC:ADA-USD) at 4.1%.
From where I sit, holding a cryptocurrency that’s 6x larger than the one in third place is a major positive. There will be only so many survivors from this revolution. Ethereum’s got a much better chance than Cardano of making the cut.
So, imagine what the holders of Cosmos (CCC:ATOM-USD) must be thinking sitting in 1oth spot in BITW’s holdings.
Considering all that Ethereum has on its plate right now, sitting where it sits puts it in an excellent position to overtake Bitcoin in the backstretch of this race.
In the meantime, I don’t know how you can complain about its 900% return over the past 52 weeks. Looking at the performance of 2,255 stocks with market capitalizations over $2 billion over the past year, there are only seven doing better than Ethereum — and two of them are blockchain and crypto stocks.
Don’t worry. Be happy.
How Does Ether Rank on the Worthless Scale
InvestorPlace’s Josh Enomoto recently discussed seven cryptocurrencies in light of JPMorgan Chase (NYSE:JPM) CEO Jamie Dimon’s assertion that Bitcoin is worthless.
My colleague believes there are specific cryptocurrencies worth following and others worth throwing in the trash. I’m interested in knowing his thoughts on Ethereum.
He sees Ether’s current lower volumes compared to early 2021 as a warning sign that the biggest holders of ETH could be ready to exit their positions knowing that retail investors aren’t buying in nearly the same volumes they were earlier in the year.
Well, given there are virtually no fundamentals you can turn to regarding Ethereum or any other crypto, technical analysis becomes the go-to for buying and selling decisions. While Josh calls buying Ether between $3,300 and $3,700 as tempting — in the last 24 hours, it has mostly hovered around $3,800 — he doesn’t hesitate to remind InvestorPlace readers that the biggest whales won’t hesitate to let retail investors hold the bag while they exit their positions.
I think it’s fair to say my colleague doesn’t think Ethereum is worthless. However, if you read between the lines, he’s recommending a cautious approach to any crypto buying or selling.
The Bottom Line
The one thing I’ve consistently said about cryptocurrencies is that their ultimate success lies in their utility. In my last piece about Ethereum, I discussed how Ethereum 2.0 would increase its utility considerably, boosting the transactions it processes per second from 30 today to more than 100,000 in Ethereum 2.0.
Once it meets this number, the world will be its oyster. In the meantime, true Ether believers ought to sit tight and chill.
Don’t worry. Be happy with your Ethereum bet.
On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.
