No contest: My top crypto to buy now

This crypto giant could be around for the long term.

| More on:
Ethereum symbol in green.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As crypto prices sink to new lows, it can be a daunting time to invest. Nobody knows for certain when the market will bottom out or how long it might take to recover, and there are no guarantees that crypto will recover at all.

That said, now is also one of the best times to invest. Prices are lower than they've been in months, making it one of the most affordable opportunities to buy. Also, if prices eventually rebound, you could stand to make a lot of money by investing now.

Choosing the right investments, though, is key. While there are never any guarantees that any cryptocurrency will succeed over time, there's one that I'm stocking up on right now: Ethereum (CRYPTO: ETH).  

Could Ethereum be a lucrative investment?

Ethereum's biggest strength is its blockchain network and its ability to host decentralized applications (dApps). These dApps range from non-fungible token (NFT) marketplaces to decentralized finance (DeFi) projects to metaverse applications.

If any of these areas see growth over time, Ethereum will benefit from it. Also, because Ethereum is the most popular network for dApps, it has the most potential for growth if NFTs, DeFi, or the metaverse succeed.

Currently, Ethereum is the second most popular cryptocurrency behind Bitcoin, with a market cap of around $135 billion. For context, Solana and Cardano -- two of Ethereum's biggest competitors -- have market caps of roughly $12 billion and $14 billion, respectively. 

Where Ethereum falls short

Although Ethereum is the biggest and strongest decentralized network, it has its flaws, too -- primarily when it comes to its speed.

Right now, Ethereum can handle only around 14 transactions per second. Not only does that limit the number of transactions on the network, but it also creates extremely high transaction costs for users. As a result, many users and developers have flocked to smaller, faster networks like Solana.

The good news is that Ethereum developers are working on an update to solve this problem. This upgrade will move Ethereum from a proof of work (PoW) protocol to a proof of stake (PoS) system, which could help the network reach speeds of up to 100,000 transactions per second.

When, exactly, that update will be completed is unclear. So far, the rollout has been plagued by delays. The latest phase of the update, called "The Merge," should happen sometime in 2022, and the final phase is planned for 2023 or 2024.

While Ethereum's upgrade is a positive move for the network, anything could happen between now and when it's completed. Newer cryptocurrencies are being developed by the day, and there's a lot of time for competitors to gain traction in the market.

Is Ethereum a good investment?

Despite its imperfections, Ethereum is one of the stronger cryptocurrencies out there. It's also heavily discounted right now, with its price down roughly 77% from its peak in November. If you've been waiting for a chance to invest, now could be your opportunity.

Before you buy, though, consider your tolerance for risk. There are no guarantees that Ethereum (or any cryptocurrency) will thrive over time, so there's always a chance you could lose your investment. Be sure, then, that you're only investing money you can comfortably afford to lose.

While nobody knows what the future holds for crypto, Ethereum may have what it takes to stick around for the long haul. If you're willing to take on more risk for the chance of seeing potentially lucrative returns, it could be the right investment for you. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

More on International Stock News

A woman stands triumphant with arms outstretched as she overlooks a city at sunset.
International Stock News

Nvidia shares reach world's most valuable milestone. Where to now?

Nvidia beats out Apple and Microsoft to be number one in the world.

Read more »

A woman looks nonplussed as she holds up a handful of Australian $50 notes.
International Stock News

Is it too late to buy Nvidia stock?

Nvidia is a big AI winner right now, but how much further can the winning streak go?

Read more »

A woman is left blank after being asked a question, she doesn't know the answer.
International Stock News

Insiders are selling Nvidia stock. Should you?

When a company's executives and board members sell their shares, it can raise concerns. But Nvidia's insider sales don't appear…

Read more »

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
International Stock News

Nvidia jumped 27% after its stock split announcement. Can Broadcom beat it?

Following in Nvidia's footsteps, Broadcom is doing a 10-for-1 stock split.

Read more »

a man with a wide, eager smile on his face holds up three fingers.
International Stock News

3 reasons to buy Nvidia like there's no tomorrow (Hint: The stock split Isn't 1 of them)

The GPU leader's shares could head even higher in the coming months and years.

Read more »

A white and black clock face is shown with three hands saying Time to Buy reflecting Citi's view that it's time to buy ASX 200 banks
International Stock News

5 Reasons Nvidia isn't in an AI-fueled bubble

Nvidia's shares may actually be cheap.

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

2 reasons to buy Nvidia after the stock split (and 1 reason to sell)

This tech giant is riding a tidal wave of AI-related demand. But is it too late for new investors to…

Read more »

Smiling man working on his laptop.
International Stock News

Which 'other' US AI stock is soaring this week?

This US AI stock is following Nvidia's footsteps in more than one way.

Read more »