Ethereum Has Better Odds for a Massive Comeback Than You Might Think

Some predictions say that Ethereum (CCC:ETH-USD) will come back as the crypto market suffers. One of those voices belongs to Cathie Wood’s Ark Invest.

A concept image of mining an Ethereum (ETH) token.
Source: Shutterstock

The asset management company says that by 2030, the second-biggest cryptocurrency will have a market capitalization of over $20 trillion.

Ether already has a lofty price tag, so it’s understandable that the company chose a more ambitious target for their projection.

Ethereum will “displace many traditional financial services” as the use of decentralized finance has become popular. It is laying the groundwork so that the Ethereum token can take over as a global currency one day.

Ark Invest forecasts that decentralized networks will be taking more market share away from traditional institutions. It predicts Ether will mainly benefit from the change.

The new year has been tough on cryptocurrency prices. Digital assets have performed similarly to stocks in the tech sector, with both dropping for a decent amount of the month.

However, Cathie Wood is a very successful investor. She was the first to pick some major winners in recent years, including Tesla (NASDAQ:TSLA) and Netflix (NASDAQ:NFLX).

When others are greedy, you should be fearful; when they are fearful, you should be greedy. Warren Buffet lives by this adage. Therefore, there is merit to treating Ethereum as a contrarian play.

Should You Invest in Ethereum?

Ethereum had a really strong December to end the year and set some new records. It peaked on Nov. 10 at $4,849, the highest of all time after coming back from a slump. The month was overall positive for Ethereum despite the small dip close to the month’s end.

Bitcoin (CCC:BTC-USD) is really good as a store of value, but it doesn’t work as Ethereum does. Ether is one of the newer cryptocurrencies competing with Bitcoin for this year’s top spot. It came very close in February 2018 but didn’t quite make it.

Ethereum and Bitcoin have experienced rapid growth since their highs last year. These cryptocurrencies will likely experience more cycles of dominance in the future, with Ethereum being the most dominant based on current market trends.

Ethereum and decentralized financial vehicles are relatively new and exciting concepts that haven’t been around for very long — but because they create a lot of opportunities, they bring some important volatility in pricing.

The blockchain provides a lot of benefits for businesses that are looking to invest in new technologies. One of the ways it does this is by being a key component in securing high-value content such as CryptoPunks, Bored Ape Yacht Club, or Art Blocks.

Many new users on Ethereum found it as an appealing option for trading NFTs; this means that if NFTs continue to increase their popularity, it’ll probably continue to attract more users.

Many are wary of crypto investing and must weigh their risk against other financial goals. Experts advise that you never invest more than 5% total in this space.

Once you reach success, it is important to look down the road and start to recognize that other important things matter than trying to outdo past rates. Setting your investments and leaving them alone is best instead of trying new methods.

Keep the Risks in Mind

Starting in December 2017, the Bitcoin price shot up, but it went down dramatically in the following months. The last two years were amazing for the crypto world. It appears that if you wish to avoid painful losses when investing in cryptocurrencies, it’s a good idea to keep your eye on the market in the short term.

The government may not always be accommodating and may impose new financial restrictions, causing problems like crashes that are out of your control.

There are a lot of great potential blockchain apps on the horizon, including platforms like Cardano (CCC:ADA-USD). While new blockchains surpass Ethereum by delivering better scalability, they still lack decentralization and critical infrastructure.

Ethereum Hype Is Justified

Ethereum’s plan to switch from PoW to PoS has been welcome news for businesses that use the platform to save them money and energy. From a monetary point of view, cryptocurrencies are becoming more and more viable for everyday purchases, and the move helps in this regard.

In my opinion, Ethereum is more solid long-term because it offers more utility than Bitcoin. If it delivers on its promise, ETH will be very difficult for Bitcoin to beat. It is hard to argue with the benefits of being first.

BTC is now widely used by both businesses and individuals. We have also seen another coin that has really taken off recently in DeFi, Ethereum’s blockchain.

Ethereum has been on a tear as of late and looks like a solid crypto investment in this bear market. There are many reasons to back the token including its popularity, bullish price movement, and more.

On the publication date, Faizan Farooque 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.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. You can check out his analysis on InvestorPlace and TipRanks.


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