Should You Buy Ethereum While It’s Below $2,500?
After a disastrous 2022, crypto has experienced a remarkable rally in recent months. Ethereum (ETH 0.05%) is currently up more than 60% since the beginning of the year, with the price hovering around $2,000 per token.
However, this upturn leaves many investors feeling conflicted. Some are optimistic that maybe this crypto winter is starting to thaw and we are on the verge of a bull run. At the same time, however, it’s hard not to feel discouraged after the past year, and many people worry that this reunion is only temporary.
So how safe is crypto right now? And should you invest in Ethereum while it’s still below the $2,500 price point? Here’s what you need to know.
Is Ethereum a safe investment?
When it comes to crypto, there are never any guarantees. The whole industry is still speculative at the moment, so no one knows for sure where things will stand a year or a decade from now.
That being said, Ethereum is one of the safer options in the crypto space. With a market capitalization of around $234 billion, it is a giant in the industry, accounting for about a fifth of the entire crypto market.
It is also far from the most popular smart contract platform, especially when it comes to decentralized finance (DeFi). But it is also the most popular network for NFT (nonfungible token) marketplaces and metaverse applications, giving it an impressive diversification within the crypto space.
But perhaps most importantly, Ethereum’s developers have proven that they are committed to making consistent improvements to the network. Last year, the blockchain successfully completed The Merge, transitioning it from a proof-of-work protocol to the far more energy-efficient proof-of-stake system.
Most recently, Ethereum completed the Shanghai and Capella updates, allowing investors to withdraw their staked crypto and improving the network’s consensus mechanism. Both of these updates are critical to Ethereum’s long-term growth, and help make this crypto giant even stronger.
Risks to consider before buying
Whether or not you should invest in Ethereum will depend on your risk tolerance and long-term outlook.
Crypto is generally a higher risk investment due to its speculative nature. Ethereum is one of the strongest players in the field, but if the crypto sector as a whole does not succeed over time, it will be tough for even powerhouse investments to survive.
Also, there’s a good chance we’ll see a lot more volatility in the near term as the industry continues to find its footing. If you’re a long-term investor, these fluctuations shouldn’t affect your strategy, but they can still be hard to bear. Before you buy, consider whether you are willing to ride out the ups and downs in the face of more volatility.
Ethereum may be a crypto titan with many advantages, but there are never any guarantees in this industry. Before you buy, consider the risks of investing in cryptocurrency to determine if it is right for your portfolio.
