Should You Buy Ethereum While It's Still Down? – The Motley Fool

0

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
After a long, discouraging crypto winter, prices have been slowly recovering so far this year.
Ethereum (ETH -0.45%) is currently up by around 53% in 2023, but it’s still down nearly 62% from its all-time high in late 2021. If you’ve been waiting for the right time to invest, now may seem like a smart buying opportunity, as crypto prices steadily inch closer to their previous peaks.
But some investors are still cautious, which is understandable considering how quickly the crypto market crashed last year. The last thing anyone wants is to invest while prices are higher, only to have the market plummet yet again.
So is it really a smart time to invest in Ethereum? The answer is, it depends.
Market volatility is always unnerving, but it’s especially challenging in the crypto space. While Ethereum has experienced incredible highs over the last few years, the lows can be unbearable for many investors.
However, remember that crypto is a long-term investment. Even the strongest cryptocurrencies will likely see extreme volatility in the near term, but the best investments have the potential for significant long-term growth.
Ethereum remains one of the strongest players in the industry, and it has some major advantages over its competitors, including:
In other words, Ethereum has a lot going for it right now. It’s consistently been one of the clear leaders in the crypto space, and if it continues its upgrades and improvements, it has the potential to soar even more over time.
As with any cryptocurrency, Ethereum is still largely speculative. While it has many distinct advantages, those are mostly speculative right now, too.
If NFTs, the metaverse, or DeFi become more mainstream, Ethereum will benefit from it. But if those applications never catch on with the public, the crypto may have a tough time staying relevant. Right now, nobody can say how this space will fare over the long term, and there’s always a chance it could fail.
This isn’t to say you shouldn’t invest in Ethereum for these reasons. For many investors, the potentially lucrative earnings outweigh the risk of crypto’s speculative nature. But in general, even the “safest” cryptocurrencies are still more volatile than stocks — which can be a deal-breaker for more risk-averse investors.  
If you’re on the fence, ask yourself which of these two scenarios you’d regret more: investing now and losing money if Ethereum fails, or not investing and missing out on those earnings if it succeeds.
There’s no right or wrong answer here, but it can help you determine where your priorities lie. If your biggest concern is making a bad investment and losing money, crypto in general may not be the best fit for you right now.
Crypto can be incredibly volatile, and it’s important to consider your risk tolerance before you invest. That said, Ethereum has built a reputation for being a leader in the industry, and it has plenty of advantages that could make it a smart buy right now.
Katie Brockman has positions in Ethereum. The Motley Fool has positions in and recommends Cardano, Ethereum, and Solana. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source

Leave a Reply

Your email address will not be published. Required fields are marked *