Is Ethereum A Good Investment in 2022?

What is Ethereum

With more and more investors starting to pay attention to ETH, we may wonder if ethereum is a good investment now? Ethereum is an open-source decentralized blockchain system with its own coin known as Ether. Apart from Ether, Ethereum also serves as a platform for a variety of other cryptocurrencies. Interestingly, the Ethereum platform also facilitates the execution of decentralized smart contracts.

The Ethereum platform was first introduced in a 2013 whitepaper by Vitalik Buterin. Later, in the summer of 2014, Buterin and his co-founders raised funds for the project in an online public crowd sale. Interestingly enough, despite the price of Ethereum in the Initial Coin Offering (ICO) being $0.311, the project team was able to raise a staggering $18.3 million in Bitcoin. In fact, to date that online public crowd sale is considered a huge success with more than 60 million Ethers having been sold. Currently, Ethereum’s price puts the return on investment (ROI) at an annualized rate of over 270%. In other words, this means that Ethereum has been quadrupling the initial investment every year since the summer of 2014.

However, it is important to note that the Ethereum foundation officially launched the blockchain on July 30, 2015, as a prototype codenamed “Frontier.” Since then, there have been several network updates. For example, Firstly “Constantinople” on February 28, 2019, secondly “Istanbul” on December 8, 2019, thirdly “Muir Glacier” on January 2, 2020, followed by “Berlin” on April 14, 2021, and most recently on August 5, 2021, the “London” hard fork. Evidently, Ethereum keeps getting better.

As a result, Ethereum is projected to be the next big blockchain considering that its goal is to create a worldwide platform for decentralized applications.  In fact, Ethereum platform allows users from all over the world to write and run censorship-resistant, downtime-resistant, and fraud-resistant softwares.

In conclusion, in this article, we are going to comprehensively analyse the viability of Ethereum as a good investment.

Ethereum’s price history

2015

At the beginning of 2015, Ethereum’s opening price was $2.83. After a while, during that year Ethereum recorded a minimum price of $0.42.

In contrast, the maximum price of Ethereum recorded that year was $3.54. Ethereum eventually closed 2015 trading at a very low price of $0.93.

2016

Ethereum’s opening price in 2016 was $0.93. Additionally, it is important to note that this was the lowest price recorded that whole year.

In spite of the poor start, Ethereum made significant improvements during the year and eventually recorded a maximum price of $21.52. Ethereum finally closed the year 2016 trading at $7.97 further highlighting how much volatile cryptos are.

2017

At the start of 2017, Ethereum’s opening price was $7.98 which is a really meagre figure. In contrast, Ethereum closed the year 2017 trading at a very high price of $710.12.

2018

 Ethereum opened the year 2018 trading at $755.76 which was a significant improvement from the previous year. Later, on January 4, 2018, Ethereum did even better and surpassed the $1000 hurdle to trade at $1045.08. In fact, after trading for more than $1000, Ethereum’s price kept on improving till it recorded an incredibly high price trading at $1432.88.

Nonetheless, just like every other cryptocurrency, Ethereum is highly volatile. For example, the minimum price of Ethereum in 2018 was $82.83. However, Ethereum finally closed the year 2018 trading at $133.37, which is not a bad price.

2019

Initially, Ethereum opened the year 2019 trading at $133.42. This was a really bad start compared to the very high prices recorded in the previous year. Nonetheless, the price of Ethereum improved mid-way through the year to register a maximum price of $361.40.

Unfortunately, a bear market trend dominated the last part of the year subsequently leading to a reduction in prices. Needless to say, it was during this time of the year that Ethereum registered its lowest price trading at $102.92. In the end, Ethereum closed the year 2019 trading at $129.61.

2020

Ethereum’s market price at beginning of January was estimated to be at $129.63. Of course, this was not a bad price compared to how the other cryptos were performing at the time.

However, the Covid 19 pandemic led to a reduction in most of the activities in the crypto market mid-way through the year. As a result, Ethereum subsequently registered the lowest price that year trading at $95.18.

Nevertheless, in late December, Ethereum’s price improved and it attained the highest price that year trading at $754.30. The improvement in price continued throughout December and Ethereum finally closed the year 2020 trading at $737.80.

2021

At the beginning of 2021, Ethereum attained a high price of $737.71.

As expected, Ethereum maintained a relatively good price throughout the rest of the year. For example, on April 22nd, Ethereum attained the price of $2641.09.

YearMaximum PriceMinimum Price
2015$3.54$0.42
2016$21.52$0.93
2017$881.94$7.98
2018$1432.88$82.83
2019$361.40$102.92
2020$754.30$95.18
Jan-Oct 24th 2021$4362.35$718.11
Is Ethereum A Good Investment

Comparison between Ethereum and other cryptocurrencies

Bitcoin vs Ethereum

It is true that both the Bitcoin and Ethereum networks are built on the concept of distributed ledgers and encryption. However, there are some key differences between the two.  First and foremost, their technical specifications are radically different. For instance, Bitcoin serves as a digital equivalent of gold. This is because just like Gold, Bitcoin is used to store value. Ether on the other hand is used to power the Ethereum network and its applications. In other words, Ethereum is useful for two purposes while Bitcoin is useful for one purpose only.

Another difference between these networks is the time taken for new blocks of data to be added. This certainly determines the time it takes to confirm transactions. Interestingly, blocks on the Bitcoin network are added on an average every 10 minutes, while on Ethereum, they take about 15 seconds.

BitcoinEthereum
Uses proof of work moving to proof of stake.Utilizes proof of work.
Takes 10 minutes block time on average.Only takes 15 seconds block time on average.
Finite supply capped at 21 million coins.Infinite supply of coins.

Cardano vs Ethereum

First and foremost, it is important to note that Ethereum and Cardano are both blockchain platforms. In that light, they were both created to function as decentralized application platforms. Certainly, this distinguishes them from cryptocurrencies like Bitcoin which functions as a medium of exchange and as a store of value.

Another distinguishing factor is that Bitcoin is seen as a first-generation cryptocurrency while Ethereum is generally considered as a second-generation cryptocurrency. Similarly, Cardano is setting itself up as a third-generation cryptocurrency. As might be expected, this is because of the safety and scalability availed by its proof of Stake (PoS) protocol.

CardanoEthereum
Uses proof of stake protocol.Utilizes proof of work protocol.
Third-generation cryptocurrency.Second generation cryptocurrency.
Functions as a decentralized application platform.A medium of exchange and  a store of value.

Dogecoin vs Ethereum

Not only are both Dogecoin and Ethereum stores of value but they are also capable of facilitating transactions. Definitely, what this means is that you can be able to pay for various commodities online using either of these cryptocurrencies.

However, the cost of carrying out transactions is not entirely equal. Actually, it is cheaper to use Dogecoin compared to Ethereum. For example, if you want to send your friend a couple of dollars, it might cost you $10 on the Ethereum network. In contrast, it will only cost you $0.10 on the Dogecoin network. Additionally, Dogecoin transactions will also process faster compared to Ethereum transactions!

DogecoinEthereum
Started as a marketing experiment.Created with a real purpose as a store of value.
Limited utility.Widely accepted as a form of payment on many avenues.
Not as frequently used as Ethereum.Frequently used.

Litecoin vs Ethereum

For starters, it is important to note that the average transaction fee for every transaction in Ethereum is $0.85. On the other hand, the average transaction fee for every transaction for Litecoin is just $0.04.

Additionally, the block time for each of these cryptocurrencies is also different.  For instance, Ethereum’s block time is just 15 seconds. Needless to say, that means that within a minute, you can confirm multiple transactions. On the other hand, Litecoin’s block time is quite higher than Ethereum’s, standing at 2 minutes 19 seconds.

Moreover, the number of Litecoins available is restricted to 84 million while the number of Ethers available is unlimited.

LitecoinEthereum
2 minutes 19 seconds block time on average.15 seconds block time on average.
Has a maximum limit of 84 million coins.  No limit to its supply.
Has an average transaction fee of $0.04.The average transaction fee is $0.85

XRP (Ripple) vs Ethereum

First and foremost, it is important to note that ripple payments are staggeringly fast. In fact, the network can process more than 10,000 different transactions in a single second. On the other hand, Ethereum is currently a lot slower than Ripple. In fact, it is almost 670 times slower to be precise! On the whole, Ethereum can only process around 15 transactions every second.

Another key difference between Ethereum and Ripple is the amount of each crypto coin that is available. To be precise, Ripple has a maximum supply of about 100 billion coins while Ethereum has no supply limit.

XRP (Ripple)Ethereum
Has a max supply of 100 billion coins.No supply limit.
Centralized.Decentralized.
Processing speed of 1000 transactions per second.Has processing speed of 15 transactions per second.

What do other people think of Ethereum

Interestingly in the major cryptocurrency wars online, people prefer to think of Ethereum as the diamond of the currencies.  Naturally, this is because just like a diamond, Ethereum has both an intrinsic value and an industrial value. In simpler words, the intrinsic value is derived from the fact that Ethereum can be used for transactional purposes while buying and selling various commodities.  On the other hand, the industrial value refers to Ethereum’s special feature of facilitating the execution of decentralized smart contracts. On the contrary, Bitcoin only has an intrinsic value. To put this in clearer terms, people buy and sell Bitcoin based on its value to the holder. If you think about it, this is very much like what happens with Gold.

All in all, there seems to be a consensus that Ethereum is the future especially due to its recent upgrades.  In fact, there are a lot of discussions online about Ethereum investments. Interestingly, the debate seems to be mainly centred on whether it is advisable to invest in Ethereum on short-term basis or long-term basis. Certainly, the answer is not that simple. Nonetheless, since you are already reading this you do not have to do all these online research. We have got the right answer for you and that will ensure you get the best deal. In brief, after reading this article thoroughly, Ethereum will be one of the best cryptocurrency investments you will ever make.

FAQ

How to buy Ethereum

If you want to buy Ethereum first you will need to open an account with a cryptocurrency exchange such as Kraken and Binance. Alternatively, you can also purchase Ethereum from beginner-friendly investment apps like Robinhood. However, it is equally important to know the downside of such apps is that they may not allow you to transfer your coins off of the app.

It is important to note that before you begin trading, you must first transfer money into your exchange or brokerage account. Certainly, this transfer could be from a checking account, a savings account, a wire transfer, or even a PayPal transfer.

Once you have successfully deposited enough money, you can then buy Ethereum coins after searching the term Ethereum or its ticker symbol ETH on the exchange trading or transfer platform. Typically, you can either choose the number of dollars you will put in or the number of Ethers that you want. The purchase will go through immediately.

How to mine Ethereum

Unfortunately, in order to mine Ethereum, computers spread out all over the world compete to solve cryptographic puzzles at the cost of processing power and energy. However, any miner that successfully solves the puzzle first is rewarded with ether (ETH). It is important to note that these rewards are compensations for securing the network, verifying transactions, and adding blocks to the blockchain. For more details please check out this article.

Should I buy Ethereum

Ethereum’s price is bound to continue rising for weeks, however, it is a fact that cryptocurrencies are subject to price swings. For that reason, we would not recommend buying Ethereum to chase short-term gains. However, it is important to note that Ethereum is a worthwhile investment for long-term ventures.

Ethereum price trends in the next few years

According to Longforecast prediction, the price of Ethereum will experience some highs and lows in the coming years. In that light, we have summarised their predictions by picking out the highest and lowest prices of the Ethereum coin for the next five years and highlighted them in the table below.  For more details, please read this article.

YearMaximum PriceMinimum Price
24th Oct- 31st Dec 2021$6525$2969
2022$13121$4433
2023$21262$12785
2024$7856$18398
2025$4430$8606

Summary

Financial interest in Ether investment always tends to follow in the wake of Bitcoin rallies. As a result, Ether investments quickly attract the attention of many investors. That being said, Ethereum is good investment for a couple of good reasons.

Firstly, the majority of activities in the cryptocurrency space happen on Ethereum. To illustrate, in 2020, we saw the emergence of decentralized finance (DeFi).

The second factor is the launch of Ethereum 2.0. This upgrade addresses serious issues with the current version of Ethereum. In particular, it reduces transaction fees. Previously, each transaction could end up costing the equivalent of tens of US dollars which was quite expensive. Additionally, Ethereum 2.0 also does away with the environmentally wasteful mining currently required to make the Ethereum blockchain function. Needless to say, this makes Ethereum even more popular ensuring an increase in price.

The final factor that places Ethereum at the top is the launch of Ethereum futures trading. Interestingly, these futures mean that traders will be able to speculate on what ether will be worth at a given date in the future for the first time. 

However, as every seasoned cryptocurrency user knows, Ethereum like any other cryptocurrency is extremely volatile. A good example is when Ether was down by 95% at one stage from its previous high of $1432.88. Nonetheless, we agree that the future of Ethereum looks really bright.

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Conclusion: Should I Buy Ethereum Now? Is It Late?

Most experts believe that the price of Ether will increase slightly in 2021. But what is the price of ETH in 10 years from 2030? It is hard to make accurate predictions but it is also certain that the price of Ether will increase steadily in the next few years. Experts believe that Ethereum-based projects will strengthen Ethereum’s position in the crypto market and provide a strong foundation for further price growth of Ether.

In summary, Ethereum is a good asset for long-term investment, which can bring huge profits to patient HODLers who are able to take risks from price fluctuations in the short term. Buy-in at the proper time and watch for the market, get out while the getting is good.

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