Whether you’re dipping your toes into crypto for the first time or you’re a seasoned digital currency investor, it’s hard to ignore. Ethereum (ETH 1.19% ). The world’s second most valuable cryptocurrency has come a long way in a short time, but in many ways it’s just getting started.
It’s not too late to grab a piece of Ethereum. Let’s run through three reasons that might be a good time for risk-tolerant investors to consider putting some cash to work in the resilient cryptocurrency that’s only six years old but already rocking the planet in the right way. senses.
1. Ethereum is a digital leader
There’s a lot to love about Ethereum right now. It’s not just a “store of value” platter of vanity, simply rising in the hope that someone down the line will be willing to pay more than you did. Ethereum’s programmable blockchain technology powers real online businesses that go beyond just the perceived value of a digital currency’s value.
No one is close to powering the more than 3,000 decentralized applications (dApps) relying on Ethereum for everything from NFT marketplaces to next-generation decentralized finance platforms. Many other crypto denominations are undergoing updates to follow Ethereum in smart contracts, but it is still the undisputed feature market leader on this front.
2. Ethereum 2.0 is going to be special
If you think Ethereum is useful and valuable now, just wait until a year. Ethereum is becoming the mother of all makeovers. At some point over the next few months, it will transition from a proof-of-work model to a proof-of-stake.
The transformation is not just about shifting production from miners to validators, silencing arguments that cryptocurrency (like other proof-of-work denominations) is not environmentally friendly. The Ethereum 2.0 migration will also make Ethereum faster and cheaper to use. If there are any flaws in his game now, they should be ironed out by early 2022.
3. History is nice in December
Two weeks ago, I selected Ethereum as my favorite crypto to buy this month, partly because it has consistently performed very well in the last month of the year. It has risen sharply in December since its launch in 2015. That’s quite an impressive run.
- December 2020: 78%
- December 2019: 39%
- December 2018: (20%)
- December 2017: 48%
- December 2016: 35%
- December 2015: 148%
My timing two weeks ago was lousy. Cryptocurrencies have trailed growth stocks lower and Ethereum is trading down 17% in December on Friday morning. It’s already close to rivaling the 20% drop it served in December 2018, but it’s safe to say that history is still on its side. Ethereum is up at least 35% in all but one of the previous six December months. We still have two weeks to go before we close the book on 2021, and the 17% decline since the start of the month gives it even more potential from the current starting line.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end consulting service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.