In the highly intricate, ever-evolving, and fiercely competitive crypto landscape, Ethereum is known as a beacon of innovation, creativity, and adaptability, and there are plenty of reasons for this. Apart from being home to Ether, its native token and the second-biggest cryptocurrency in the world after Bitcoin, the platform has set itself apart from other participants in the market through its groundbreaking smart contract functionality which allows developers to create an entire host of decentralized applications.
And let’s not forget the long string of upgrades and updates that Ethereum has rolled out since the network was launched in 2015, which also emphasizes its dedication to ongoing advancement. Does that mean you should learn how to buy crypto currency and start investing in Ethereum right away? Given the network’s performance over the years and its relentless pursuit of excellence, one can easily be swayed to take the leap and buy Ethereum without doing much research, secure in the knowledge they’re investing in a time-tested and reputable asset, with high growth potential.
With a price of $2,325 and a market cap of $280.03B USD at the time of writing, many traders and investors see Ethereum as a safe bet, at least when compared to other digital assets that don’t enjoy the same level of popularity and haven’t proven their resilience. However, investing in crypto without doing your due diligence is never a good idea considering the high risk associated with this asset class.
Instead of relying on reputation and hype when assessing your options, it’s best to do more in-depth research, taking into account both Ethereum’s past performance and its prospects for the future before deciding where to invest your hard-earned money.
Ethereum’s Run So Far
It’s obvious from Ethereum’s price history that the altcoin leader has had a pretty tumultuous past. Much like all other crypto assets, Ethereum’s growth hasn’t been linear but rather resembles a roller-coaster with many ups and downs, and unexpected turns that have kept traders and investors wondering about what might happen next. In 2016, less than a year since its launch, Ethereum gained more than 2,500% and then plummeted by 70%. A similar scenario happened in 2017 when Ethereum increased by a whopping 20,000% only to lose more than 90% of its value in the following year.
These historical prices provide a picture of Ethereum’s inherent volatility. In general, Ethereum follows Bitcoin’s lead just as the rest of the cryptocurrency market. When the crypto king goes on a bull run, all the other coins, Ethereum included, follow suit and experience a surge in their value. Similarly, when Bitcoin goes on a bear cycle, it drags all the altcoins with it, causing a chain reaction with prices crashing across the board.
Ethereum has had a pretty solid run this year, with its price jumping from $2,200 back in January to $3,500 at the beginning of April. Unlike its main contender which managed to set a new record high, Ethereum is still stuck under the 4K threshold, unable to come closer to its former peak price of $4,891.
What to Expect in the Months to Come?
Before casting any predictions, it’s important to remind everyone that the high level of volatility that all crypto assets present, and the wide variety of factors that influence their price trajectory, make it impossible for anyone to forecast future price trends with a high level of accuracy.
Nonetheless, we can analyze certain events and developments that might have a say in the way Ethereum will behave in the following months. As has become customary, Ethereum’s roadmap included several upgrades for this year as well. After the Dencun upgrade which was completed in March, several other notable improvements are expected to follow, including the the Prague/Electra upgrade (Pralectra) and the Petra upgrade, scheduled to take place towards the end of the year.
Upgrades aside, Ethereum supporters and crypto fans at large are excited about spot Ethereum ETFs which have been approved this year. The U.S. Securities and Exchange Commission gave the green light for the launch of several spot Bitcoin exchange-traded funds in January by major asset managers like Blackrock, Fidelity, Franklin Templeton, and Grayscale, and then for the spot ETH ETFs.
Inflation levels and interest rates will also play a role in the evolution of the market as we’ve come to learn over the years. So, Ethereum’s trajectory also depends on how the Fed plans to manage interest rates in 2024.
Two Opposite Scenarios
According to analysts, there are two different scenarios that could play out for Ethereum in the following months. The first sees Ethereum experiencing a steady appreciation driven primarily by restaking which would make it possible for the same tokens to be utilized across multiple projects and protocols, thus ensuring a higher level of security for these networks.
The other scenario is less optimistic, drawing attention to the increased regulatory scrutiny of crypto assets which could muddle the waters in the market and drive traders and investors away. This could pose further challenges for Ethereum which is already having difficulties maintaining momentum and pushing past current resistance levels.
It’s difficult to say which of these two scenarios is more likely to happen since the balance could tilt in both directions. It’s therefore up to each individual to decide if Ethereum represents a good investment at the moment, based on their research and investment strategy.
