1 crypto I would buy right now

Don’t look now, but after a miserable first half of 2022, cryptos are quietly staging a fast and furious comeback from lows of the past month and a half – right after many commentators seemingly wrote them off. If you are a new crypto investor looking to dip your toes in the digital waters following this renewed optimism, here are the cryptocurrencies I would buy right now: Ethereum (ETH -4.76%).

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Momentum is coming back

Since hitting a cycle low of $897 on June 18, Ethereum has rewarded its holders with a 97% gain from that low, illustrating how quickly things can change in the crypto market, especially based on sentiment. If you’re wondering if it’s too late to invest in Ethereum, remember that it’s still down 63% from its all-time high of $4,847, which it hit last November. Furthermore, if Ethereum reaches mass adoption by the general public, it is likely that everyone is still “early”. Given how volatile cryptocurrency can be on a daily basis, an investor interested in starting a position in Ethereum but concerned about buying after a rally may benefit from using a strategy long used by equity investors, dollar cost averaging , to start a smaller position now and then add to it over time instead of starting a full position all at once.

Coming up on The Merge

The main factor behind Ethereum’s recent rise is the impending transition to proof of stake. This transition, often referred to as The Merge, is the biggest change that will happen to the Ethereum network and its users in years, if not ever. Switching to proof-of-stake consensus should help solve two of the main challenges that Ethereum has been dealing with for years – high transaction fees and long waiting times for transactions. Furthermore, it will allow more users to participate in the Ethereum network and earn rewards by staking Ethereum. This essentially means that users will be able to help secure the network by committing some of Ethereum to validate transactions in exchange for a cut of stake rewards. Finally, the transition will help Ethereum become more climate-friendly by reducing its carbon footprint, which has been a major criticism of proof-of-work cryptocurrencies over the years.

The foundation of DeFi

Ethereum has a market cap of $208 billion, dwarfing all other cryptocurrencies except Bitcoin. It also predates most of today’s other prominent cryptocurrencies with a launch date as far back as 2015, which is ages ago in crypto terms. As such, Ethereum holds significant status within the crypto world, and Ethereum is the system that underpins much of the decentralized finance (DeFi) ecosystem today. Many other popular cryptocurrencies are ERC-20 tokens built on Ethereum, including USD coin, Uniswapand Shiba Inu. Polygon, which is now the 13th largest cryptocurrency by market capitalization after a blistering performance this summer, was built as a scaling solution for the Ethereum ecosystem.

Furthermore, the importance of Ethereum to DeFi and to cryptocurrency as a whole is underscored by the fact that many other top cryptocurrencies use the Ethereum Virtual Machine (EVM), which is essentially a layer of middleware that enables smart contracts from Ethereum to run on other blockchains.

Test the water and add over time

For investors interested in getting involved in cryptocurrency, Ethereum is the cryptocurrency I would buy right now. It offers the opportunity to buy a blue chip crypto that has significant momentum behind it, but still has plenty of runway ahead of it before approaching its previous highs. It has a significant catalyst that comes up with the transition to proof of stake, and it is the foundation upon which decentralized finance is built. Cryptocurrency comes with a lot of volatility and risk, so it is best suited for risk-tolerant investors. Investors can smooth out this volatility and risk by entering a full Ethereum position over time using dollar cost averaging to build a position in this leading cryptocurrency.