It’s well-known that Ethereum is the 2nd most popular cryptocurrency in the world and a critical piece of the revolutionary industry of digital assets. So, unsurprisingly, many investors want exposure to it, but since crypto is a volatile space, they wonder when it’s the right time to make a move and buy Ethereum?
The short and simple answer is that it depends on your risk tolerance and belief in the asset’s long-term potential. However, more complex factors determine whether Ethereum is a good investment, including the regulatory landscape and market sentiment. According to binance, at the time of writing, Ethereum’s price is $2,245.48.
Regarding 2024, Ethereum’s price could increase if the SEC approves a regulatory framework for digital assets, which could further propel institutional investment. If this happens, Ethereum could reach a price of $3,600. As always, this is only speculative, as nothing is certain when it comes to the future of cryptocurrencies. Still, Ethereum can present gains for investors, whether in the short run or the long run.
Ethereum Has Had An Impressive Performance Over The Years
Since its 2013 inception, Ethereum has grown steadily over the years, attracting many enthusiasts to the crypto industry, and giving tough competition to Bitcoin.
While ETH initially traded for less than $1, its value started increasing in 2016, and since then, it maintained an upside trajectory, experiencing a bull trend with a high of $1,396.
In November 2021, Ethereum hit its all-time high of $4,891, gaining even more attention from investors who wanted to earn rewards from buying it. Unfortunately, Ethereum’s moment of glory didn’t last long, as its price experienced a dramatic decline in the following years when the crypto market struggled to remain afloat.
Despite the Merge’s completion, Ethereum’s value didn’t really change, and the asset kept facing volatility throughout 2023. But 2024 could be a prosperous year for the digital asset, as the Dencun Upgrade, which promises to enhance the network’s efficiency, could be a catalyst for a price surge.
A Look At The Factors That Impact Ethereum’s Price
As mentioned, several factors determine how ETH will perform, and investors should keep an eye on them when pondering whether they should buy the token.
- Market sentiment: The market buzz matters significantly when it comes to the prices of cryptocurrencies. If there is a positive sentiment, more investors are likely to jump on the crypto bandwagon and purchase ETH, which will naturally result in a higher token price.
On the flip side, if the market sentiment is negative due to negative news like blockchain hacks or significant regulatory changes, investors could panic buy, leading to price declines. It’s crucial to analyze market sentiment before deciding whether to buy Ethereum or not, and you can do so by using the Crypto Fear & Greed Index, which provides accurate data on this aspect.
- Regulatory landscape: Ethereum’s legal status is another critical factor that influences its price, so investors should always be updated on the latest news. Suppose a country restricts cryptocurrencies’ use; this would inevitably lead to a dramatic reducing of ETH’s liquidity. But the other scenario can also be true: a country could show support for cryptocurrencies, resulting in increased demand and liquidity and potentially skyrocketing Ethereum’s price.
- Developer activity: For a while, Ethereum has been a go-to platform for developers seeking to build dApps. So, their level of activity also plays a role in determining whether ETH price rises or not in the future.
For instance, developers’ decision to keep using it would increase the demand for ETH, thus resulting in a higher price. On the contrary, if developers choose other chains that they find more appealing for creating dApps, this would negatively impact Ethereum’s price.
- Demand from institutional investors: This is another critical factor contributing to Ethereum’s price movement in a positive direction. Suppose a prominent investment company supports Ethereum; this can build confidence among investors to add the digital asset to their portfolios.
However, if institutional investors sell their ETH holdings, that could indicate a certain scepticism regarding Ethereum’s future growth, which would cause the asset’s price to drop.
Ethereum’s Utility Makes It An Appealing Investment Option
It’s no secret that the best crypto projects are those with real-world applications, and Ethereum excels when it comes to this. The asset is very innovative, and can be used in different ways:
1. DeFi: One of Ethereum’s most significant utilities is in the DeFi landscape. Hundreds of decentralized financial platforms are developed on the Ethereum blockchain, enabling many activities, such as token swapping and automated loans.
DeFi is different from traditional systems because it provides lower fees and enables greater entry access, which means anyone can use the services anywhere.
2. Supply chain management: Supply chains are complex but Ethereum’s blockchain simplifies the entire process by creating transparency and ensuring the transaction record is impossible to alter. As a result, supply chain inefficiencies are solved, and there is a lower probability of fraud.
3. Blockchain gaming: Ethereum also stands out for its applications in the gaming sector, having the potential to transform it by allowing secure in-game transactions.
According to stats, the blockchain gaming market will achieve $301 billion by 2030, and the gaming experience will become more and more dynamic, boosting developers’ revenue streams.
4. Digital identities: Another outstanding application of Ethereum is digital identity, which enables users to store personal information on the blockchain and control who gets access to it.
For instance, students can have a blockchain-based identity and share their academic credentials with colleges and universities. This would automatically translate in a more streamlined process.
So, Should You Buy Ethereum In 2024?
Without a doubt, Ethereum is here to stay, and considering its continuous growth and upgrades, many analysts believe that 2024 could be the year when the digital asset hits a milestone. Although it is unlikely that it will outpace Bitcoin, it will remain just as popular as it, with an impressive market cap and a lot of potential in terms of development and value.
In short, Ethereum is an investment with high rewards, but it’s also risky, so buying it or not depends on each investor’s risk tolerance level.
You Might Be Like:
