Is Ethereum (ETH) a Good Investment Option in 2021?
Back in 2013, an unknown genius and creator of Bitcoin Magazine, Vitalik Buterin, developed the Ethereum concept to improve Bitcoin. With his development, he launched a revolutionary breakthrough in the field of technology. He became the owner of a Peter Thiel scholarship of one hundred thousand dollars. Abandoned his studies at the university, he set about developing his project.
Nowadays, Ethereum is the second most popular cryptocurrency in the world, which in many respects (for example, growth rate, capitalization growth, etc.), has already overtaken Bitcoin. Is Ethereum worth investing in 2020? Let’s find out with Changelly!
Ethereum is an open-source platform based on the decentralized technology of blockchain that allows developers and programmers all over the world to create decentralized applications, also known as DApps in any life sphere. Whether you rotate in the musical sphere or running a real estate business, if you have an idea of a cool app that can improve the industry you’re working in, you can create such an application using the Ethereum engine power.
Ethereum differs from Bitcoin in a coordinated way. Ethereum’s capabilities are enhanced by the smart contract feature. This is what has become an essential factor in its increasing popularity. For ordinary money transfers, you can use the usual bitcoins or any other cryptocurrency. However, Ethereum translates user relationships on a fundamentally different plane.
A smart contract is a complex software algorithm designed to support commercial contracts in blockchain technology. All other cryptocurrencies use only one type of address – a personal account. In Ethereum, the address of the contract is added to it, in which you can write down any terms of the transaction. In other words, when agreeing with other persons, you will not need the help of a lawyer or a notary. The platform itself acts as a guarantor of the fulfillment of the agreed conditions.
As a distributed and open virtual machine, Ethereum launches any decentralized programs. The platform is inherently an ecosystem that distributes data around the world. They are not subject to change or manipulation, and they cannot be removed.
This technology is used in many countries in a vast number of areas. Medicine and public administration, logistics, and financing. Thanks to her, the following functions became available:
Formation of complex smart contacts for supply management;
Launching applications of various categories (service, games, etc.);
Transformation of a token into any asset (precious metals and stones inclusive);
Creation of user identification services;
Verify the authenticity of the documents.
Regularly appearing applications based on Ethereum is one of the reasons why the cryptocurrency is kept on the second line of the rating.
Ethereum Price Fluctuations History
The first version of the Ethereum cryptocurrency protocol called Frontier was launched on July 30, 2015. Ethereum did not yet exist. The first surviving historical records regarding the value of Ethereum date back to August 7. On this day, ETH was added to the Kraken crypto exchange and was priced at $2.77 per coin. Over the next three days, the price dropped four times to $ 0.68, most likely under the influence of rapid sales organized by early investors.
On August 18, the first significant event for the air network dates from the first 100,000 blocks. At this point, the rate drops to $1. Then, over two months, a systematic decrease in the price of Ether occurs. During this period, more and more crypto enthusiasts will learn about the Ether. The Devcon-1 developer conference made a particularly significant contribution to its popularization.
On January 11, 2016, the price of Ethereum finally again breaks the $1 mark and rises upwards so that it will never return to it. Within two months, the Ethereum rate is overgrowing against the background of information about the previous replacement of the network protocol with a more stable version (Homestead) and reaches the first significant high ($15) on March 13. At this point, Ethereum’s capitalization for the first time goes beyond $1 billion.
On March 14, when the hard fork took place, a sharp correction begins, according to the results of which by the end of April, the price of air is halved to $7.3. On June 16, 2016, hackers stole about $50 million in ETH from the project. The panic began on the market, due to which Ethereum almost fell in price in 2 days up to $11.
A controversial hard fork was held on July 20, thus giving rise to the Ethereum Classic project, followed by supporters of a free censorship and blockchain intervention. Two days after that, the Ethereum rate, which recovered to almost $15, fell again and reached $8 by the beginning of August.
In mid-September, Ethereum was added to the Ledger Nano S hardware wallet. Growth resumes to $ 15.
On September 22, it became known about a DDoS attack on the Ethereum network, as a result of which its work significantly slows down. This news is the impetus for the start of a local downtrend, which lasts 2.5 months and ends on December 5 at around $6. By the end of the year, the rate is consolidating in the $ 7-9 point
This year for Ethereum begins at around $8. Throughout January and February, there is a smooth increase to $13. This mark starts with more rapid growth. In the twenties of March, Ethereum rises in price to $53–59. On April 26, a new price push is taking place, which in 10 days leads the air to an almost twofold rise in price to $95.
On May 18, Ether is added to the trading platform AVATRADE. In June, the price reaches $400. The price drop coincides with the general market decline amid news from China about the ban on ICOs and cryptocurrency trading and ends at $200.
Until mid-November, the price of Ethereum is consolidating in the range of $275-350, and on the 23rd of November, it breaks the level of $400, which becomes support for two weeks. On December 11, the cost of Ethereum enters the last growth phase in 2017, within which it reaches the level of $800.
From the very first day of the new year, the Ethereum rate rises up and on January 13 reaches an absolute maximum in its history of $1,400. On February 5, it is the first rebound from the level of $700. From this moment until the beginning of April, there is a systematic descent to the level of $380.
The fall slows down in early September at around $180, and until mid-November, there is a consolidation between the levels of $200-300. Then the Ether has time to drop to approximately $85. This is followed by a rise in the rate to the level of $130-140, at which 2018 ends for Ethereum.
In the first week of January, Ethereum returns to the second position in the CoinMarketCap ranking, and its cost reaches $160. The local maximums during this time are $160 and $180. On February 28, the Ethereum network finally hosts the Constantinople hard fork, but the price does not respond to this event.
On May 11, during the next wave of Bitcoin growth, the price of Ethereum begins to move up, which in five days reached $280. In summer and early autumn, the coin is traded for $170 to $220.
The beginning of 2020 hit both real-world economics and the crypto world hard. Even behemoths like Bitcoin and Ethereum have felt that. While at first Ethereum had a bull run with its price rising up from $132 in January to $280 in February, it soon started to fall. This drop continued until March, 13th when the price reached $106. After that, it stabilized and began to rebound, being traded for $125-140. On April, 29th, Ethereum price was $211, almost returning to the pre-drop levels.
Ethereum vs. Bitcoin vs. XRP vs. Litecoin Investment
30 Day High / Low
All of those cryptos are viable options for those wishing to invest. However, each coin has its own niche: BTC is usually traded in small quantities since the cost of a single coin is very high, while XRP is traded in bulk, as its costs are low. ETH and LTC are more of middle ground coins, with ETH costing more, so it allows for a more flexible investing. Where on that slide you fall in is entirely your decision.
Why is ETH a valuable coin?
Ethereum was not conceived as a cryptocurrency, but it became an excellent transitional tool from fiat assets to altcoins. Its flexibility and versatility can be applied in different ways:
Investing ICO. Investors in the choice of projects usually prefer it;
Placement of dApps. The platform is replete with applications, and their number is steadily increasing;
DAO. Decentralized autonomous organizations appear one after another. An example is Dash;
The mining industry has grown significantly, using the potential of ETH.
Experts estimate that 7 of the 10 largest crypto assets are based on the basis of Ethereum. Many large investors (including even Microsoft Corporation) are inclined to believe that it is strategically more profitable not to buy Ethereum for nothing, but to invest in projects related to the platform. After all, roughly speaking, Ethereum is the token of the Ethereum blockchain, a massive platform for creating decentralized applications.
If Bitcoin is primarily a means of payment, then Ethereum is also a tool for safe investments. New start-ups appear every day. These are payment cryptocurrency systems, real-time asset trading platforms (OmiseGo), and even sweepstakes platforms (Augur). All of them are popular and promising projects that, according to analysts, can shoot at any time.
Many new projects continue to appear with enviable regularity. Many of them are potentially good options for long-term investments. However, without a thorough preliminary analysis and risk assessment, you cannot invest in startups.
The value of Ethereum is directly related to its demand among consumers. The more people want to buy Ethereum, the higher its market price. And now, Ethereum is undoubtedly popular, which means that so far, there are no serious reasons to fear the collapse or collapse of this cryptocurrency.
Ethereum Roadmap & Ambitions
Ethereum development is far from over. The Ethereum Foundation, which leads the Ethereum development, has repeatedly proven in the past that it is capable of running a global business and enriching and diversifying the business world with new ideas. Understandably, many are confused after the bursting of the Bitcoin bubble.
Blockchain technologies are likely to change the way we trade with each other over the medium term. Especially the Smart Contracts, which are an innovation of Ethereum, gave rise to the conviction that the new technology market will probably still hold many surprises.
The year 2020 Ethereum began with a massive update, Ethereum 2.0. Currently, it is in Phase 0, the initial network development. During this time, Ethereum will renew its internal structure, as it will be fractured in 64 interconnected shards following Phase 1, in 2021. This, along with the new PoS algorithm and eWASM, will ensure that transactions of ETH2 will be even faster than before and blockchain itself more efficient. Ethereum in 2020 is an excellent investment, even among the global crisis.
After Phases 0 and 1, which will take place in 2020 and 2021, respectively, the Ethereum team is already hashing out what Phase 2 will entail, and how long it will take to reach it. So keep an eye out for more groundbreaking news about ETH (or ETH2).
The Ethereum course has multiplied over the past two years. By the time of the great crypto-hype of the winter of 2017/2018, Ethereum’s course had already risen by a thousand percent. In January 2018, during the hype, the coin reached a market value of up to $1,300 per Ether.
Then the big crash followed. Ethereum has been falling steadily since then and stands at around $140 per coin at its lowest level since May 2017. However, if Ethereum falls, is this an excellent opportunity for investors? Or is it too late to invest in Ethereum in 2020?
The lack of acceptance and the lack of regulations that unambiguously place the cryptocurrencies in the financial world continue to make new technologies difficult. Quite a few believe that the market will continue to break down and that Ether investing is no longer worthwhile.
Others are convinced that the Ethereum course will break new records in the future as Ethereum is a widely used technology. Many crypto start-ups use Ethereum’s ERC20 standard to bring their cryptocurrencies to market. With this standard and the ERC20 token, a separate Ethereum Market emerged in the market, which is still flourishing despite numerous competing products.
Even if the market is currently in crisis, the many positive signals of the past weeks and months speak a clear language. The acceptance of cryptocurrencies, such as Ethereum, is increasing. More and more regulators around the world are taking on the subject. The new investment options, such as the Ethereum shares, open the market to a broader audience. The high-risk ICOs are increasingly being replaced by the so-called STOs, which attract investors with stakes in business profits and a great deal of security.
There are few reasons to believe that anything will change in the near future. Especially as a development platform, Ethereum today plays an important role for those companies that finance their dApps via STOs. Ethereum is no longer just a cryptocurrency, but it has created its own Ethereum Market. It probably will not break that easily.
Above all, the considerable skepticism of the present gives reason to hope that a current investment can pay off properly, at least in the long term. Those investing now may be among those who will benefit from the next big hype, provided correctly interpret the signs and get out again while everyone else is excited about investing.
The advantage of using this particular digital asset allows you to protect your investments from all kinds of risks, and the constant upward trend in prices will only confirm the correctness of your choice.
Analysts note that in the entire history of Ethereum, even after sharp drops, its value is restored and exceeds the performance of the previous month (on average, by 29%). Experienced traders use the established pattern and argue that depreciation is a great opportunity to buy promising cryptocurrency with a good discount.
When the exchange rate starts to grow again, you can either sell the purchased currency more expensive than you bought or invest it in a developing startup and receive dividends from this.
The following are the risks that could theoretically affect the drop in the Ether rate:
Severe bugs in smart contracts or protocols.
The failure of a large startup tied to Ethereum (e.g., the collapse of the payment platform, which operated through the use of Ethereum and its smart contracts. In this case, investors lose their money, and the creators of Ethereum will be forced to compensate for their losses, which leads to a decrease in demand for Ethereum and a drop in its price);
Critical hacking or a series of hacks.
Like almost every other cryptocurrency, Ethereum is also subject to extreme volatility: the price of Ethereum falls, then it rises again, then it falls, and so on. These fluctuations occur in the double-digit percentage range.
As the price of Ether rises and falls every day, you can also make some profit on it while buying and selling the asset in the short term. The key principle of this type of investment is to catch the moment when to invest in Ether (do it when ETH is cheap) and the moment when the Ether price grew up enough so you can sell it and make some profit. There can be numerous circles of buying and selling. You need to be very organized and also patient.
If you want to invest in Ethereum, you have to be prepared for it. And a good way of preparation is by reading crypto price predictions.
Investing in Ethereum: Pros & Cons
Ethereum Pros & Cons
Decentralized, digital currency
Technological limitations e.g., in scalability
Enormous market capitalization and spread
High volatility: Performance is subject to extreme volatility
The solid and respected developer team
Smart Contract developers can currently use the Ethereum’s own programming language Solidity
Smart Contract Technology
So far, extreme power consumption by mining with PoW (a change to PoS is already planned)
Development environment for distributed applications (dApps)
How to invest in Ethereum?
How can I invest in Ethereum? This is clarified in the following sections. An Ethereum invest instruction for the Ethereum purchase and trading is also presented in the next few paragraphs.
To earn money with Ethereum, there are now many different possibilities. Investing in Ethereum 2020 is possible, for example, through Ethereum Investment Trusts, Banking on Ethereum. Alternatively, you can trade Ethereum Derivatives, or buy Ethereum Cryptocurrency (ETH) directly.
#1. Buy Ethereum (ETH)
You can buy Ethereum cryptocurrency fast and easy at Changelly. If you own any cryptocurrency, you can exchange it to ETH coins. You can also buy Ethereum instantly with your credit card for fiat currency.
[add-changelly-widget from=usd to=eth]
Buy ETH with USD, EURO or GBP online within minutes. Credit cards accepted
#2. Trade Ethereum (ETH) with CFDs
Investing in Ethereum is not only buying Ethereum. For example, if you do not want to buy Ethereum directly and still want to earn Ethereum, you can do it. You can turn to one of the many crypto brokers that offer derivative options for crypto traders with their CFDs.
The advantage of trading with CFDs is distinct. With CFDs, you can often achieve high returns regardless of the Ethereum price, if you predict the price behavior correctly. Besides, you do not need an Ethereum Wallet because you do not buy the coin.
However, CFD trading carries unique risks and requires a deal with this form of investment in detail. So, try not to make any mistakes. Otherwise, you may lose your Ethereum Investment entirely in just one trade.
#3. Stock Trading
The decisive advantage of stock trading is its tradition. Stock trading is regulated internationally. Besides, many investors find it easier to invest in equities rather than buying cryptocurrencies directly. Thanks to Ethereum stock trading, more people gain access to the market.
This makes investing in Ethereum 2020 more accessible than ever. Those who plan their investment for the medium to long term should urgently take a closer look at this investment option.
#4. Ethereum Mining
Miners are a vital element of the Ethereum network. They create new blocks on the Ethereum Blockchain. The transactions recorded on the previous block are confirmed and committed with each new block. If nobody mined Ethereum anymore, the transaction confirmations would no longer be possible, and the cryptocurrency could no longer be traded.
Ethereum is incentivizing miners and rewarding. For each new block, the miners receive Ethereum. The miners use hardware components such as GPUs. PoW stands for “Proof of Work”, which is a unique mining method that uses many cryptocurrencies modeled after Bitcoin. So does Ethereum.
The decryption difficulty varies with PoW depending on the network load. If the algorithm has been successfully decrypted, a new block is created. The network then checks to see if it exists and validates the information written to it.
Due to the enormous energy expenditure, which is connected with the mining, the PoW procedure stands for some time in the criticism. Ethereum has been planning for years to replace the PoW process with the PoS process (“proof of stake”), which is much less energy-intensive.
Final Thoughts on Ethereum
Ethereum cryptocurrency is an excellent choice for investment. The company has work products, a strong team, strong partnerships, alliances, and related funds. The Ether survived many cryptocurrencies and for a long time, gained a foothold in second place.
Ask yourself how big your risk appetite is and whether you prefer to invest in Ethereum for a long or short time. If you want to achieve significant profits in the short term, CFD trading, in particular, is an attractive investment option. However, it involves additional risks.
Those who are not as risk-averse, a medium to long-term investment in Ethereum is probably more suitable. Ethereum Market has many alternatives: Ethereum stocks are also ideal for more cautious types of investors. It’s the right way for those who want to benefit from Ethereum development but do not like wallets or private keys.
Our verdict: investing in Ethereum in 2020 is probably worth it.
Disclaimer: This article should not be considered as offering trading recommendations. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
Changelly is a secure instant crypto exchange that has 150+ cryptocurrencies available to be swapped and bought at market-best rates. Operating since 2015, the platform and its mobile application attract over a million visitors monthly, who all enjoy quick and simple exchanges, low transparent fees, and 24/7 live support.