Ethereum is making waves in the crypto world as an altcoin, rivaling Bitcoin as one of the most popular cryptocurrencies. It has also experienced remarkable growth with its price increasing by more than 1,000% in the last 12 months. While crypto prices have plummeted over the past few weeks, that doesn’t necessarily mean it’s a bad time to buy. In fact, dips can provide a great opportunity to invest when prices are lower. Considering Ethereum is one of the higher priced altcoins, now might be a good time to buy it while it’s on sale.
However, just because cryptocurrency costs less doesn’t necessarily mean it’s a good investment. Ethereum is still a high-risk cryptocurrency and not the right choice for everyone. If you are undecided about investing, there are two reasons to consider buying now and one reason to avoid it.
Why consider buying?
1- Ethereum 2.0 can provide competitive advantage
One of the criticisms of cryptocurrency in general is that it consumes an incredible amount of energy. Crypto tokens are “mined” through a series of complex computer processes. This mining process requires a significant amount of energy, and crypto critics have expressed concern about its impact on the environment.
Tesla CEO Elon Musk recently announced that he will no longer accept Bitcoin as a form of payment due to the company’s environmental impact. This announcement was one of the reasons behind the latest crypto crash as investors questioned whether the cryptocurrency would actually be successful in the long run.
However, Ethereum is making moves to make the technology more energy efficient. Technically speaking, Ethereum Blockchain is the name of its technology, while Ether is the token hosted on this Blockchain. Ethereum 2.0 is an updated version of the Blockchain that will be released later this year or early next year and claims to use 99.95% less energy than current technology. As Ethereum becomes more energy efficient, it can gain a competitive advantage in the crypto industry and stay a step ahead of Bitcoin.
2- Ethereum blockchain has more benefits
For any cryptocurrency to survive, it must have some sort of real-world utility. Currently, Bitcoin is the most popular and widely accepted cryptocurrency. However, the Ethereum Blockchain is used for various purposes that give it an advantage.
Ethereum is not only home to the Ether token, but is also the basis for other applications such as immutable tokens (NFTs) and decentralized finance. NFTs can change the way digital items are bought and sold, and the decentralized finance movement aims to revolutionize the banking industry.
Also, Ethereum 2.0 plans to make Blockchain faster and more scalable so it can be used for more applications. This could bring more benefits and more advantages to Ethereum.
Why should you avoid Ethereum right now?
1- Extremely variable
As the past few weeks have proven, cryptocurrency is still a highly volatile investment. Between May 12 and May 24, Ethereum lost about 50% of its value. While it has rebounded somewhat since then, setbacks like this can be hard to put up with.
This particular crypto crash isn’t the first dramatic loss Ethereum has suffered, either. During 2018, the price of Ethereum dropped by about 94%. Cryptocurrency is still a highly speculative investment and there is no guarantee that it will be successful in the long run. We are in uncharted territory with crypto and no one can predict whether it will change the world or crash.
If you decide to invest in Ethereum, make sure you have a high tolerance for risk and only invest money you can afford to lose. The last thing you want to do is load your savings into an investment as high-risk as cryptocurrency.Ethereum has tremendous earning potential, but it is also an incredibly risky investment. Before investing in this cryptocurrency, make sure you do your research and know what you’re getting into. Crypto can be a life-changing investment, but it may not be right for everyone.