The crypto market is off to a horrendous start this year. Several factors have weighed down the market’s performance, with investors looking for safer bets. However, the long-term investment case for cryptos such as Ethereum (ETH-USD) remains the same. ETH-USD is arguably the best crypto investment with a laundry list of use-cases that are second to none.
The consensus among the financial punditry was that crypto could challenge traditional investments. Crypto adoption has risen over 100% in the past couple of years, and if that keeps up, there could be over a billion crypto users. Moreover, institutional investment in the sector is also rising at a healthy pace, adding billions to the industry market capitalization.
Ethereum is in pole position to capture the rapid growth in the sector in the coming years. It has the security and decentralization to enable a range of emerging services such as Web 3.0, DeFi, and others. ETH-USD offers the best risk/return opportunity in the sector and remains a fascinating crypto bet for the long haul.
Crypto Narratives
Ethereum offers investors the best exposure to the growth of some of the most lucrative crypto sectors. Three main sectors will underpin the development of crypto investments for the foreseeable future.
Firstly, we have Web 3.0. Unlike with its predecessors, in Web 3.0, you can create your content and own it and benefit from its perpetuity. It essentially breaks the centralized model of the internet, thereby democratizing for its users. Cryptocurrencies allow for a more direct connection between creators and their content.
Another niche that stems out of the Web 3.0 concept is non-fungible tokens (NFTs). NFTs can be anything from art, video images, collectibles, and other items, representing ownership of a specific item on a blockchain.
The NFT market has grown from $340 million in 2020 to over $13 billion last year. Ethereum dominates this space currently and represents the best way to benefit from the market’s rapid growth.
Furthermore, we then have smart contracts and decentralized finance, which can revolutionize financial markets. Smart contracts effectively cut out the middleman, operating significantly faster than legacy transactions.
Everything is clear in the code and cuts out the impact of third parties to streamline the process. DeFi protocol revenue is over $5 billion but could be worth 100 times more than it is today in the next five years.
The Future Of ETH-USD
Ethereum has been relatively unsuccessful in keeping up the colossal demand from users. In response to its massive user base, it’s been making pertinent changes to its network as part of a multiphase upgrade.
The Beacon chain upgrade went live recently, and it enables users to corroborate transactions using a proof-of-stake (PoS) system. Through staking their holdings, transactions can be validated economically and with more energy efficiency.
There are a couple of more upgrades to come next year. The first of these upgrades involve markedly improving the scalability of Ethereum’s network through sharding.
The addition of new nodes on the platform could potentially support thousands of transactions per second. Moreover, the third phase will add greater functionality to the sharding chains for dynamic communication.
Hence, with these upcoming updates, Ethereum could further expand its dominance in the sector. It is currently the best investment in the crypto space with the most upside potential this year.
Moreover, it has an unmatched list of use-cases, solidifying its position as a true industry stalwart. It will take a long time for its peers to catch up to it, and its latest updates will further expand its supremacy. Hence, if there’s one crypto you should invest in this year, it’s Ether.
On the date of publication, Muslim Farooque held a long position in Ethereum. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
