A bull market is coming: one crypto to buy now

It’s no secret that the crypto market has struggled over the past year. The entire sector has lost nearly two-thirds of its value since the end of 2021, with its market capitalization falling from a staggering $3 trillion to around $1.19 trillion.

Many investors are also concerned that a recession is on the way. If that happens, this crypto winter could drag on even longer.

The good news, however, is that a bull market will eventually come. And there’s one investment you might want to make now before prices rise: Ethereum (ETH 1.24%).

Why Ethereum is well positioned for a bull market

Launched in 2015, Ethereum has proven to withstand market volatility. It has faced countless downturns in recent years, including a particularly severe decline in 2018 when its price fell by a whopping 94%.

Ethereum price data by YCharts.

While past performance does not predict future returns, Ethereum’s long history is more promising than many other cryptocurrencies. Currently, the price is down about 64% from its peak, which is far from the worst it has seen.

Ethereum’s position in the crypto market also gives it a distinct advantage. It is the primary blockchain for decentralized applications ranging from NFT marketplaces to DeFi projects to the metaverse. If any of these applications gain widespread use, Ethereum will be in a good position to benefit.

Finally, Ethereum developers have proven that they are committed to improving the blockchain. Last year, The Merge went smoothly, moving the network to a proof-of-stake protocol and significantly reducing energy consumption. And future updates will aim to reduce transaction times and fees, making the blockchain faster and more affordable for users.

Is crypto a smart buy right now?

When the entire market is volatile, it can be unnerving to invest anywhere – let alone in an industry known for its volatility. Before investing in Ethereum, it is important to consider whether you are willing to take on the risks associated with buying cryptocurrency.

It is almost guaranteed that the stock market will recover from this downturn. After all, the market has been around for decades and has recovered from dozens of recessions during that time. Sooner or later this bear market will give way to a bull market.

But crypto is still in its infancy, so there are no promises that this sector will survive in the long term.

If the crypto market thrives, Ethereum could be a fantastic buy right now. Because prices are lower, you can stock up on discount and then reap the rewards when the market recovers. But if crypto doesn’t succeed over time, even the strongest investments can fail.

Before you buy, think about whether it’s a risk you’re willing to take. When in doubt, ask yourself which scenario you would regret the most: investing now and losing money if crypto fails, or not investing and missing out on potentially lucrative returns if crypto succeeds.

There is no right or wrong answer here, as your risk tolerance is personal. But it is important to understand the potential downsides of investing in crypto, as there are never any guarantees in this sector.

Weigh risk versus reward

Ethereum is in a unique position, as it is a strong investment in a speculative industry. The blockchain has several distinct advantages and is well diversified across many different niches within the crypto space – from NFTs to DeFi to the metaverse and more.

However, because crypto is still speculative, Ethereum’s long-term success may depend on the survival of the sector as a whole. Because no one knows what the future holds for crypto, Ethereum remains a risky investment.

Although there are serious risks to consider, it is still one of the strongest players in the field. And if there’s one cryptocurrency I have in my portfolio for the long term, it’s Ethereum.