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

The word is out: Bitcoin (CRYPTO: BTC) is pumping, meme coins are soaring, and the broader crypto market is booming. Yet Ethereum (CRYPTO: ETH), the world's second-largest cryptocurrency, remains stuck in the doldrums. Despite its reputation as a groundbreaking blockchain for decentralised applications (dApps) and smart contracts, Ethereum has struggled to match Bitcoin's breathtaking rise or maintain pace with the majority of other cryptocurrencies.

But for ETH holders or prospective investors, there's reason for hope. While Ethereum's recent performance might seem underwhelming, several underlying factors point to potential recovery and long-term value. Here are three critical things every crypto investor should know about Ethereum today.

1. Ethereum has struggled to keep pace with Bitcoin

To understand Ethereum's current position, it's essential to look at its performance relative to Bitcoin. This is best captured by the ETH/BTC chart, which measures Ethereum's price in terms of Bitcoin rather than U.S. dollars. Why does this matter? Charting ETH in BTC-based terms reveals how Ethereum fares against the market leader, providing insight into its relative strength -- or lack thereof.

For more than two years, Ethereum has been "bleeding" value relative to Bitcoin. In simpler terms, investors would have been better off holding Bitcoin instead of Ethereum during this period. For many, including myself, this has been a bitter pill to swallow.

However, there's a silver lining: ETH/BTC is now near historical lows. While this doesn't guarantee an immediate rebound, such low valuations often represent potential inflection points.

2. Why Ethereum is struggling so much

Ethereum's underperformance isn't just about Bitcoin's dominance -- it also stems from internal challenges. A key factor is the rise of Layer-2 (L2) networks, such as Arbitrum, Optimism, and Base. While these innovations are designed to scale Ethereum by processing transactions in batches, they've inadvertently disrupted one of Ethereum's core value drivers: its fee burn mechanism.

To understand this, let's break it down into smaller pieces:

• The fee burn mechanism: Since Ethereum implemented EIP-1559, a portion of transaction fees is burned (removed from circulation). This process is intended to reduce Ethereum's supply and create deflationary pressure as more transactions occur on the network.
• Layer-2 basics: Layer-2 networks batch transactions and then publish them to Ethereum's main blockchain in bundles known as "blobs." This process reduces congestion and makes Ethereum more scalable. Because they are faster and cheaper to use, Layer-2s have seen an explosion of activity.
• The Dencun upgrade: Introduced in March 2024, this upgrade made it cheaper for L2s to publish blobs to Ethereum. While this improved scalability and reduced costs, it also caused a steep decline in transaction fees paid to Ethereum's main network.

Add it all up, and the issue is clear to see. With more transactions occurring on Layer-2 networks, Ethereum's burn rate has taken a hit. While the fee burn mechanism introduced with EIP-1559 made Ethereum deflationary for nearly a year, this has changed, since Ethereum's inflation rate has climbed steadily since the Dencun upgrade went live.

3. Signs of hope for Ethereum's recovery

Despite these challenges, Ethereum's future isn't all gloom and doom. There are tangible signs of recovery and renewed momentum that investors should pay attention to.

Notably, over the past three weeks, Ethereum's transaction count (a proxy for fee generation and burn) is on the rise. Whether it's decentralised finance (DeFi) protocols, meme coin trading, or broader market enthusiasm, activity on Ethereum is increasing. If this trend continues, Ethereum could soon flip back to a deflationary state, boosting its value proposition.

Furthermore, Ethereum's developer community is actively discussing ways to address the impact of L2 networks on ETH's value. A recent proposal named EIP-7781 aims to enhance Ethereum's core performance to attract more activity and increase the burn process. While these discussions are still in early stages, they underscore that Ethereum developers are aware of the issue, and solutions could be on the horizon.

Finally, it's important to consider how broader economic factors could give Ethereum a lift. With the Federal Reserve lowering interest rates, risk-on assets like Ethereum and other cryptocurrencies often benefit. Historical trends support this: In 2019, the Fed's shift from raising rates to cutting them eventually provided a tailwind for Ethereum. This momentum grew even stronger when the Fed introduced quantitative easing, further boosting its performance.

Final considerations to keep in mind

It's been a tough ride for Ethereum investors, especially over the past year and a half, as ETH has lagged behind Bitcoin and the broader market. However, this isn't uncommon. Historically, the years following Bitcoin halvings tend to be Bitcoin-dominated, with Ethereum and other assets playing catch-up later in the cycle.

While no one can predict the future, I believe Ethereum's foundation remains strong. With increasing network activity, ongoing developer innovations, and macroeconomic tailwinds on the horizon, Ethereum appears well-positioned for a recovery. As this bull market progresses, ETH holders may find themselves rewarded for their patience.

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

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RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Few industries have a clear and drastic growth potential as that of electric vehicles (EVs) right now. By 2030, analysts project that two out of every three cars sold globally will be an EV. For investors looking to give their portfolio exposure to this burgeoning potential, there is one clear option: Tesla (NASDAQ: TSLA).

Over the years, the company has refined its vertically integrated supply chain, grown its production capacity, and produced some of the most sought-after vehicles on the market. Add it all up, and Tesla has established itself as the premier EV company in the industry. However, it probably isn't for every investor.

The valuation dilemma

Today, Tesla's valuation stands at approximately five times that of the second most-valuable automaker, Toyota. This is evident in the price-to-earnings (P/E) ratio, where Tesla trades at 47 while Toyota is around 7. Even the third most-valuable automaker and Tesla's most prominent challenger in the EV space, BYD, has serious room between it and Tesla.

TSLA PE ratio data by YCharts.

This discrepancy highlights what many refer to as the "valuation dilemma." Some analysts believe that if Tesla's stock were to be valued solely off of its EVs, then it would be worth only around $135. While its energy production and storage segment is growing at a healthy clip, it doesn't justify the difference between the base EV valuation and what its stock is worth today, about $185.

What we are seeing is the market's expectations for its alternative projects such as humanoid robots, autonomous vehicles, and robotaxis to eventually bear fruit, even though they are not yet producing revenue.

Beyond EVs: The future of Tesla

Here lies the potential issue of investing in Tesla. While the company will surely continue to benefit from its leading position in the EV market and increasing global adoption of EVs, for the stock to see substantial future returns, it will need to successfully develop and commercialize its transformative technologies.

The good news is that the company is showing progress. Its supercomputer, Dojo, which is responsible for powering its artificial intelligence (AI) future, has doubled its computing capacity in just 2024. And Musk recently revealed that the company will unveil its autonomous vehicle in August and has plans to launch a robotaxi business once full autonomy is reached, an opportunity that could more than double its revenue by some estimates.

Lastly, there is Optimus, its humanoid robot. It has progressed enough that it is currently used in the company's factories to replace humans doing repetitive tasks, and if all goes to plan, it should hit markets in 2025.

Analysts expect that humanoid robots will be more popular than cars one day. By CEO Elon Musk's estimates, these robots could have a potential market worth more than $1 trillion, of which he thinks Tesla could grab a healthy 10% share.

Tesla is for you if...

While there is still clearly progress to be made, the potential impact these technologies could have on society would be monumental -- and they would have a similar impact on Tesla's stock. However, we can't fool ourselves: There is still a relative amount of risk involved. Not to mention that it's no secret Tesla and Musk are often known for optimistic timelines.

This means that the type of investors who are best suited for the stock are those who have a healthy appetite for risk and a long-term investment horizon.

There are few other companies that offer the level of exposure to the cutting-edge technologies of tomorrow like Tesla can. Along with the risk, its blend of EV market leadership and innovative ventures provides a unique opportunity that could yield significant rewards for investors who fit the criteria.

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

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BYD Company and Tesla. RJ Fulton has positions in Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It's hard to imagine that just a year ago, many notable cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) hit new all-time highs.

In November 2021, the most valuable cryptocurrency, Bitcoin, peaked at around $67,000. Meanwhile, the second-most valuable cryptocurrency, Ethereum, notched an all-time high just shy of $4,900.

That month, the market cap of the cryptocurrency asset class reached a collective value of over $2.8 trillion, a new record. But since then, Bitcoin and Ethereum are both down nearly 65% from their highs and the total crypto market cap sits at just over $1 trillion, a fraction of what it once was.

After this kind of obliteration, concerns are likely warranted. If you're a new crypto investor, this is likely your first time witnessing a price decline of this magnitude. Welcome to crypto.

The overall trajectory of cryptocurrencies has climbed over the past decade. Still, it seemed all hope might just be lost in some brutal stretches. Let's take a look at some of those rough patches to put the current one into a little better context. 

Seasons come and go

One of the first crypto bear markets occurred throughout most of 2014 and 2015. After the asset class hit a new market cap all-time high of more than $15.5 billion in December 2013, a slow descent ensued over the next two years and bottomed around $3.7 billion in May 2015, a 75% decrease.

During that same period, Bitcoin lost 80% of its value and went from around $1,100 to just a few hundred dollars.

Yet prices returned to new highs by January 2018. The total crypto market cap reached more than $827 billion and Bitcoin hit a price of almost $20,000, jumps of 22,000% and 9,400%, respectively. 

Those highs were short-lived, like many market tops, and a crypto winter gripped the market for all of 2018. After finding a bottom around January 2019, the crypto market cap had shed 80% of its value and fallen to just over $100 billion. In a similar fashion, Bitcoin lost more than three-quarters of its value. 

But by November 2021, those woes of 2018 were all but forgotten. In a matter of about two and a half years, the crypto asset class hit a new all-time high of around $2.8 trillion and Bitcoin reached more than $67,000. 

Crypto investors now find themselves in a similar situation to years past. Since that peak, the crypto market cap has lost more than half of its value, and Bitcoin is down nearly two-thirds from where it once was. 

The point is, crypto has been here and done that. Not just once, but three times. And each past decimation has been followed by a considerable rally. 

Lessons to be learned

Investors shouldn't act with certainty and think that just because it happened once, it will happen again, but they can use data to make informed decisions.

And the data shows that historically, investors have the most to gain when crypto and Bitcoin lose around two-thirds of their value.

In addition, the data shows that the return to new highs is not an overnight process. Nor will it happen in a year. It usually takes about two to three years before new highs are made. This isn't to give you a sense of false hope but rather serve as advice to keep a long-time horizon. 

Hindsight is always 20/20, but imagine if you invested at the absolute bottom of each one of these past bear markets.

A $1,000 investment in Bitcoin when it was worth just a few hundred dollars in 2015 would have been worth more than $90,000 by 2018. A similar $1,000 investment at the 2019 market bottom, when Bitcoin was worth just over $3,200, would have grown to around $20,000 by November 2021. 

Investors today need to keep a few things in mind when navigating these tumultuous times. First, maintain a broad time horizon. The true winners of this bear market will be the ones who plan on holding for at least three years and ideally even longer. 

Second, prioritizing cryptocurrencies with a solid track record is a proven strategy to minimize risk and maximize potential.

It isn't unheard of for a cryptocurrency to be here today and not make it to tomorrow. Investing in "blue chip" cryptocurrencies like Bitcoin and Ethereum is most recommended since they account for more than half of the value in the entire crypto market. 

Finally, consistency is key. Ensuring that you continue to gain exposure by investing regardless of the price is the best way to maximize your potential profits should prices return to new highs. Ignore the day-to-day and week-to-week price fluctuations.

Remember, bull markets make you money, but taking advantage of bear markets can make you rich. 

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

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

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

The cryptocurrency market is changing, evolving into an asset class for investors -- many of them younger -- looking for exposure outside of traditional assets like stocks and bonds.  

Charles Schwab (NYSE: SCHW), a financial services company that provides customers with various investment products, recently conducted a study that shows just how far cryptocurrencies have come in the past decade. The survey asked 1,000 customers with 401(k)s aged 21 to 70 a range of questions related to investing, retirement, and more. Participants were split into four age groups: baby boomers, Gen X, millennials, and Gen Z.  

There were plenty of recurring themes in the study that usually had to do with the embrace of new technology in their investing practices or lack thereof. Millennials and Gen Z consistently showed that they are interested in less traditional assets, and are utilizing smart phones and social media to research and facilitate trades. 

Most interesting was the divide in sentiment on cryptocurrencies between younger generations and the older ones. Only 4% of baby boomers owned cryptocurrencies, compared with 47% of millennials and 43% of Gen Z. 

In addition, participants were asked about what new assets they would like to have access to in their 401(k). At the top of the list for millennials and Gen Z were cryptocurrencies. Roughly 45% of those cohorts wanted to have cryptocurrency options, while only 31% of Gen X and just 11% of baby boomers wanted similar access. 

This research shows similar trends to what a Bank of America study found in mid-October: Cryptocurrencies are becoming more sought after by younger investors. As this trend continues to evolve, it should further legitimize the asset class -- and that makes it a great time for investors to get in now while it's still early. 

Narrowing your options

But there are thousands of cryptocurrencies in circulation today. Which ones should investors prioritize?

To get a better idea, we should look at what cryptocurrencies financial service companies are interested in. Turns out there is one that clearly stands out from the rest: Bitcoin (CRYPTO: BTC). 

As the world's first and most valuable cryptocurrency, Bitcoin is in a class of its own since being created in 2009. Over the last dozen years or so, Bitcoin has transformed from a highly speculative asset deemed to only be used by criminals to one that is owned by high-profile investors, and even Fortune 500 companies like Tesla.

It's this visibility that has helped it become one of the most sought-after cryptocurrencies today, and investment firms are coming to this realization. Charles Schwab competitor Fidelity became the first financial services company to offer its 401(k) customers exposure to Bitcoin in April. Since then, similar moves have been made by other companies to meet client demands. In August 2022 the world's largest asset management firm, BlackRock, partnered with the popular cryptocurrency exchange Coinbase to offer its institutional customers access to Bitcoin trading.

There are other examples, but simply put, Bitcoin is leaps and bounds ahead of any other cryptocurrency when it comes to becoming a recognized asset. As the second-most-valuable cryptocurrency, Ethereum might be the next best option to Bitcoin, but the distance separating the two is wide. For this reason, Bitcoin seems to be the most likely candidate out of all cryptocurrencies to go mainstream first.

We should expect demand for Bitcoin to filter into the world of finance, business, and even our every day lives as younger investors continue to seek exposure. This process won't happen overnight, or even in the coming months, but will likely take years. This is why now is a great opportunity to buy Bitcoin in preparation for a future where the original cryptocurrency cements itself as a necessary addition to every portfolio. 

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

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RJ Fulton has positions in Bitcoin. Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Coinbase Global, Inc., Ethereum, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Charles Schwab. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On the What Bitcoin Did podcast, ARK Invest chief executive officer Cathie Wood shed some light on Bitcoin (CRYPTO: BTC). Maybe the most intriguing, but not most important, part of the interview was that she finally disclosed for the first time when she originally bought Bitcoin. Back in 2015, Wood purchased $100,000 of Bitcoin when its price was hovering around $250. That investment is worth about $7.5 million today. 

Wood's faith in Bitcoin has only grown since 2015. When her firm started researching the world's first cryptocurrency, she said they quickly realized Bitcoin had the potential to be "one of the most profound innovations of our time".

Gold, the dollar, and Bitcoin

During the initial research into Bitcoin, Wood and her team worked with one of the world's most prominent economists with expertise in monetary policy Art Laffer. Laffer served under President Ronald Reagan on the Economic Policy Advisory Board and has been active in economic policy on the national and international stage ever since. 

Wood said that it was Laffer's analysis of Bitcoin that led her to make her first purchase. She said that Laffer was in awe of the dynamics behind Bitcoin. As she put it, Laffer said that he had been looking for a currency like Bitcoin "since we went off the gold exchange standard".

Before the US abandoned the gold standard in 1973, the value of the dollar was fixed relative to the price of gold. It's considered by many that the gold standard mitigated the issuance of money and, subsequently, quelled inflation because the amount of physical gold held by a government acted as a limit to the creation of new money.

After the gold standard was dropped, there was little to dissuade the government from printing more money or manipulating monetary policy. When a government can control the money supply, it can finance any agenda or project regardless of how popular it may or may not be. This is simplified to maintain brevity but theoretically, all it has to do is print more money and it can come up with the funding. Today, the dollar lacks traits of intrinsic value that it had when it was on the gold standard and it is almost constantly inflated to finance government budgets.

As the government takes on more costs, it subsequently increases its debt burden. To get a better idea, we can take a look at the US national debt, which has increased more than 6,500% since 1973. Some debt is considered healthy, but a balance sheet with an exorbitant amount of liabilities compared to assets can spell trouble for economies when those debts eventually need to be paid. 

Like gold, but better

Laffer wasn't a huge fan of the current monetary standard and once he discovered that Bitcoin had many characteristics superior to gold, he was sold on its potential. Bitcoin one-upped gold. Unlike gold, Bitcoin is private, digital, easily divisible, and rules-based. 

Let's unpack that one by one because Wood believes that each of these characteristics makes Bitcoin even more valuable than gold. Firstly, Bitcoin runs on a blockchain, which means that all transactions are encrypted and have pseudonyms. Transactions on its blockchain cannot be altered and they can only be halted if the user doesn't have sufficient funds. 

Second, Bitcoin is digital. This makes it much more portable than gold and even the dollar. Bitcoin holders only need a digital wallet on their phone or computer to hold or transfer value. If you lose your phone, the funds are protected and you can access funds by entering your unique password on another device. In addition, digital money serves an integral role in the age of the internet that gold or the dollar falls short of.

Bitcoin is also easily divisible. Even though its price sits at around $20,000 today, users can send and receive fractions of Bitcoin with just the press of a button. No need to carry spare change, find larger or smaller bills in your wallet, or carry around gold bullions (although of course almost no one does that). 

Lastly, Bitcoin runs on specific rules. There is a limited supply that cannot be inflated or manipulated. That means no government can meddle in how it operates or even block transactions. 

Most importantly, it does all of this without any centralized authority overseeing it. Instead of one person or agency running it, computers, referred to as nodes, around the world run the Bitcoin blockchain to ensure that it remains decentralized and operates without any interference.

Bitcoin's potential

When considering all of this, Wood needed no further convincing. She made her original purchase and continues to hold on to that original investment. But since 2015, much has changed. Bitcoin hit a high of nearly $70,000 in November 2021 and its ascension to prominence has even led to publicly traded companies like Tesla holding some on their balance sheet as an alternative to cash, further legitimatizing it as a viable asset. 

It's been nothing short of an astronomical rise. Yet, Wood believes Bitcoin has more in store. In her and Laffer's opinion, Bitcoin could have a value roughly equal to that of the entire U.S. monetary base. During their research in 2015 when they originally posited this, that figure was about $4.25 trillion. If Bitcoin's market cap reached that mark, it would mean one Bitcoin would be worth nearly $215,000 -- a far cry from its current $20,000 price. 

So what's Wood's best advice? Have patience. She said that by investing with a time horizon over 10 years and ignoring price fluctuations, "you're going to win."

RJ Fulton has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin and Tesla. The Motley Fool has a disclosure policy.

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

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Staying current with trends is one of the most important facets of successful investing. Being quick to recognize those that will eventually turn into the status quo is one way to build a portfolio that beats the market.   

Imagine investing in some of the most high-profile tech stocks a decade ago. Today, companies like Meta Platforms (NASDAQ: META), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and many others are intertwined with our daily lives. An investor aware of trends a decade ago could have foreseen that and capitalized on those opportunities. In the last 10 years, the tech-heavy Nasdaq Stock Market increased nearly 250% in value.   

Now, hindsight is always 20/20, but there is one trend today that presents a similar opportunity to that of a decade ago.

The new age of the internet

Our reliance on the internet seemingly increases every year. Some companies capitalized on this and now have an omnipresent role in our daily lives. These companies provide technology, track your every move on the internet, and generate an absurd profit from their centralized business models. But it looks like that might be coming to an end thanks to new technology with the potential to upend the current status quo of the internet. 

Known as Web3, this new age of the internet aims to be everything that our current internet, referred to as Web2, isn't. In Web3, things such as social media, finance, gaming, and the metaverse have the potential to mark a break from today's centralization. With Web3, decentralized blockchains would be the backbone for an internet that's open source, offers secure interoperability between apps, and is entirely trustless -- meaning no third party, like Google, is needed for the system to function. 

A recent report by Vantage Market Research on the current standing of Web3 valued the sector at just under $3 billion. But the same report says it has the potential to grow to roughly $23 billion by 2028. That's an increase of more than 700%. So how can investors capitalize on this opportunity?

Well, because blockchains are the foundation of Web3, owning the cryptocurrencies native to those blockchains is one simple way to gain exposure to the new age of the internet. Based on current developments, I believe there are three that are rising to the task of supporting Web3's future growth: Ethereum (CRYPTO: ETH), Polygon (CRYPTO: MATIC), and Arweave (CRYPTO: AR).  

Ethereum

Ethereum is slowly becoming the foundation of Web3. To be straightforward, there is no possibility of Web3 without Ethereum. With its smart contracts, developers can program decentralized apps (dApps) to replace third-party entities, allow user data to flow seamlessly between applications without any collection, and (the best part) be highly secure and execute automatically when conditions are met. There are other smart-contract-based blockchains like Solana (CRYPTO: SOL) and Cardano (CRYPTO: ADA), but Ethereum has risen to the top as one of the most used blockchains. Its popularity has caused it to become the home of the most development for Web3 use cases. It could help to think of Ethereum as the base layer or code that allows Web3 to function, as JavaScript or HTML is for Web2. Any investor interested in Web3 should make sure they have a substantial amount of Ether in their portfolio.

Polygon

This network is positioning itself to become a powerhouse of Web3 as the new age of the internet continues to advance. Polygon is unique because it makes the shortcomings of Ethereum (namely slow transaction speeds and high fees) a thing of the past without sacrificing the security and decentralization that make Ethereum so desirable. To do this, Polygon offloads transactions from Ethereum's blockchain and then adds them back later. The technology that Polygon uses makes transactions lightning fast at a cost of less than a penny. 

Polygon co-founder Mihailo Bjelic might have said it best when talking about what Web3 needs. For a blockchain to become the "holy grail of Web3 infrastructure" it must have "scalability, security, and Ethereum compatibility." If Web3 is to support all the internet users of the world, it must remain fast and cheap. With Polygon, that now becomes possible.

Arweave

Last but not least is Arweave. In a world full of data, that data needs a home. Arweave is a data storage solution that uses blockchain technology to provide a simple way to retain information -- forever. The best part about Arweave is that no central authority oversees the data, no one can alter the data once it's on the blockchain. In addition, Arweave is compatible with smart contracts, which means Web3 developers can customize dApps to use the data on Arweave's blockchain. And, in keeping with Web3 principles, that data can't be used to generate profits because it's anonymous, and it can never be altered because it's secure on a blockchain. 

To understand how Arweave could benefit investors, we must first understand how Arweave works. We will keep it simple, but to store data on Arweave's blockchain, users must purchase storage space with the AR coin. A user could be a regular person wanting to save a cherished photograph or another blockchain wanting to store its transaction history to free up space. The thinking is that as Arweave's blockchain grows and supports more data storage for Web3, the AR coin should rise in value as demand for it grows.

Imagine entering the metaverse through glasses or virtual reality goggles and, as on the home screen on your phone, seeing all your favorite apps and games there waiting for you. Those apps and games all communicate with each other seamlessly to provide a unique experience just for you without the need of any Big Tech company. Your bank account, photos, and other information are all stored on the blockchain and are completely secure and anonymous.

Web3 is far from its final form, and it's difficult to guess just what it might look like, but that is why investors have so much to gain right now. As the internet continues to evolve, investors can take advantage of a trend that has the potential to become the status quo. 

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

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RJ Fulton has positions in Cardano, Ethereum, and Solana. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Ethereum, Meta Platforms, Inc., Microsoft, Polygon, and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns and has recommended Ethereum and Solana. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Bear markets are a part of investing, especially in crypto. While the stock market was on a bull run for the most part until late last year, ever since the Great Recession, there have been a handful of periods when cryptocurrencies have gone through their own bear markets.  

When this happens, it's called a crypto winter, and it isn't uncommon for the cryptocurrency market class to collectively fall by more than 60%. In fact, in the last crypto winter of 2018, the cryptocurrency asset class was decimated and lost more than 80% of its value. 

Yet despite this extreme drop, the market recovered over the next three years and rose to new highs in 2021. From its 2018 bottom, the cryptocurrency market cap increased by more than 2,500% and notched a collective value of just under $3 billion.

One crypto CEO is hopeful that another similar situation might unfold. But a few things have to happen first. 

Been there, done that

Ryan Selkis founded Messari, a cryptocurrency research and data analysis company, in 2013 when the asset class was in its infancy. The idea to create an easily accessible and intuitive platform for users to explore cryptocurrency charts and trends has helped the CEO become one of the industry's prominent figures. 

As a seasoned veteran, Selkis has been through his fair share of crypto winters and bear markets. He believes this one is similar to others since it came after a period of rapid growth -- too much growth that happened too quickly. 

Selkis thinks that a bit of turbulence in the market is healthy and necessary to spur the next bull market. When bear markets arrive, companies and blockchains that struggle to provide true utility inevitably go out of business. To ensure they can remain competitive, blockchains must either strategize anew or further develop their ultimate visions so they don't become obsolete. 

As Selkis put it, the arrival of crypto winters helps "wash away all the dead wood" and create room for new competitors. He further elaborated that "bear markets are good for getting the right people in the room" so that they can help lead another wave of growth and innovation.

If the current crypto winter is similar to those of the past, investors should plan on a few things. 

Lessons to be learned

First, not every cryptocurrency around today will make it to the next bull market -- should one arrive. When looking at the top 10 cryptocurrencies by market cap from June 2018, arguably the middle of the last crypto winter, only four are still in the top 10 today.

The natural process of succession eliminates blockchains that fail to evolve and provide necessary utility. Investors should prioritize holding cryptocurrencies such as Bitcoin (CRYPTO: BTC) or Ethereum (CRYPTO: ETH), which are built for the long haul, have a proven track record, and aren't part of some short-lived trend. 

In addition, if past bear markets can tell us anything, recoveries are a drawn-out process. It took nearly three years for the cryptocurrency market to peak from its dismal low in December 2018. We aren't even a year into the current crypto winter, but that shouldn't be cause for concern. 

Instead, investors should use this time to build up their positions and remain consistent in their allocations. If the past is any indication of the future, then a bull market should return. Of course, nothing can be accounted for with certainty. Still, the growing trend of blockchains and cryptocurrencies permeating into business models of companies and people's daily lives is difficult to ignore. 

While the technology continues to evolve, an investment in specific cryptocurrencies fostering innovation could be of immense value if the market starts to recover. Keep the big picture in focus and stay consistent. Prioritizing your investments in blockchains that provide true utility is the best way to position your portfolio for success should this crypto winter thaw. 

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

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

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In early September, Coinbase Global's (NASDAQ: COIN) CEO, Brian Armstrong, appeared on CNBC to discuss his company's management of the crypto winter, his thoughts about particular cryptocurrencies, and where he thinks the market is headed in the coming months. 

Armstrong has been at the helm of Coinbase since he founded the company in 2012. Since then, the cryptocurrency market has gone through numerous boom-and-bust cycles. When Armstrong started his business, Bitcoin (CRYPTO: BTC) traded for less than $15. Today, it is hovering around $20,000, and Armstrong's net worth is believed to be around $2 billion. 

A challenging time, but there is reason for hope

Just because Armstrong is the CEO of one of the most popular cryptocurrency exchanges doesn't mean he knows exactly what will happen next in the crypto market.

But he has been around since just about the beginning of cryptocurrencies and has managed to keep his company afloat regardless of economic conditions. So when he shares his thoughts on the market today, people inevitably listen. 

In the CNBC interview, Armstrong was asked about the current crypto environment and what it could look like once it returns to healthier levels. Most notable were his comments on a transition from primarily retail investing in crypto to larger institutions now joining in.

Armstrong believes that one particular sector will drive the next wave of crypto adoption: big tech. He cited the agreement between Coinbase and the world's largest asset manager, BlackRock (NYSE: BLK).

In the agreement, the latter's investing software will integrate directly with Coinbase so BlackRock clients can purchase Bitcoin seamlessly.

Armstrong thinks that more and more companies will follow this business model in the future. Since these large companies typically have more money on hand than retail investors, he is optimistic that this influx of capital entering the crypto market could send it to heights we have yet to see. 

But until then, Armstrong's company faces an uphill battle as investors shy away from risky assets like cryptocurrencies due to poor macroeconomic conditions.

Coinbase primarily generates profits from the transaction fees it charges for trades. With less trade volume, Coinbase's profits are taking a severe hit. 

He was asked about when he sees the current crypto winter ending. He said that this one is a little different from other crypto winters in the past since it "happens to coincide with the broader macro environment coming down." He was mainly referring to rising inflation and climbing interest rates. 

Armstrong hopes that the macro environment improves in the next 12 to 18 months, allowing crypto to have a "nice recovery".

The main takeaway

Investors shouldn't hang on to every word that comes out of the mouths of billionaires, but they should consider these statements when making decisions because they may contain valuable insights.

Armstrong does have more experience in the crypto industry than just about anyone else, and his knowledge can be helpful in gaining more perspective on the sector's current position. 

Armstrong believes that there are cycles when it comes to crypto, similar to the stock market. The incredible growth that the sector experienced from 2020 to 2021 was not sustainable, and it was inevitable that some sort of correction would follow.

Suppose Armstrong is correct, and the market is in for a lackluster performance over the next year and a half. In that case, that means now could be the time for investors to take advantage of incredibly discounted prices in preparation for a return to a healthier market. 

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

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What was once just a market of one is now flooded with other options for cryptocurrency investors. The arrival of meme coins that seem to create millionaires overnight makes it easy to believe that cryptocurrency investments are meant only for the short term. But despite a crowded field, there is one cryptocurrency investors should count on never selling -- Ethereum (CRYPTO: ETH). 

Like Bitcoin (CRYPTO: BTC), Ethereum is a cryptocurrency that changed our thinking about finance in the digital age, but for different reasons. Ethereum is unique from Bitcoin in myriad ways. But one, in particular, is responsible for what is possibly the greatest innovation to result from blockchain and cryptocurrency technologies -- decentralized finance, better known as DeFi.

The new age of finance

The traditional financial world relies on centralized authorities like banks, notaries, brokers, exchanges, and other middlemen who manage and process financial services. Traditional financial processes, such as applying for a loan or purchasing a stock, require some sort of intermediary to conduct the transaction. 

But because of Ethereum and its innovative smart-contract technology, these traditional financial processes are becoming increasingly obsolete. Smart contracts are the backbone of DeFi and are what make Ethereum so unique. Before its creation in 2014, no other cryptocurrency had smart-contract capabilities. The creation of smart contracts allows blockchain developers to customize conditions and criteria for executing particular actions. 

For example, smart contracts could oversee loan agreements and release collateral upon full repayment. Since smart contracts can integrate with other data, they could also regulate agricultural drought insurance policies by automatically paying out if agreed amounts of rainfall occur. 

In addition to their seemingly infinite customization and potential, smart contracts and DeFi could completely upend what we believe traditional institutions' roles are in the financial world. 

One of the most appealing aspects of DeFi is its inclusivity. If you want to utilize a DeFi financial product, all you need is an internet connection. There are no credit bureaus, no brokers, and no loan officers. As long as a crypto wallet is set up, users can trade and move assets anytime and anywhere. 

In addition, all transactions are in real-time and completely transparent. There is no need for banks or brokers to process transactions since they occur near instantaneously on the blockchain. The other perk of the blockchain is that once a transaction is added, anyone with an internet connection can view activity on the network. It doesn't hurt that just about any possibility of tampering or malfeasance is eliminated due to the blockchain's high level of security.

Arguably, the greatest benefit of DeFi is that it is constantly evolving. Applications and projects built on Ethereum are all open-source. That means developers can integrate multiple DeFi apps to create financial products to meet new user demands as they arise. 

The first-mover advantage

Since Ethereum was the first blockchain to possess smart-contract functionality, it holds most of the market share that makes up the DeFi sector. Despite new competitors like Tron (CRYPTO: TRX), Binance Coin (CRYPTO: BNB), and Avalanche (CRYPTO: AVAX) arriving to grab some of the market, they face an uphill battle because Ethereum's grasp on the DeFi economy is unbelievably disproportionate.

We can look at a statistic called Total Value Locked (TVL) to compare the collective value of a blockchain's DeFi ecosystem. Think of it like the market cap of a company. 

Out of the $62.5 billion invested across DeFi as of this writing, nearly $36 billion is on Ethereum's blockchain. The next-closest competitor is Tron, and this blockchain only supports about $9 billion of value. It's not even close. 

The potential long-term value DeFi presents should be heavily weighed by investors, especially considering it's only in its infancy. Those who are optimistic that DeFi can usurp traditional finance should count on Ethereum continuing to dominate for the foreseeable future. 

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

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The Polygon (CRYPTO: MATIC) blockchain made a name for itself over the last few years thanks in part to Ethereum's (CRYPTO: ETH) rise. Polygon is a Layer 2 scaling solution for Ethereum. This means that Polygon helps make Ethereum more efficient, since Ethereum suffers from congestion and high traffic at times. Users flock to Polygon because it offers the security and decentralization of Ethereum, but with faster speeds and lower fees. 

Polygon has a proven track record, but its future is what's most exciting. Even with a brutal bear market gripping most cryptocurrencies, Polygon's developers continue to create new solutions to support more and more use cases. 

zk-What?

Arguably the most important development coming from Polygon is known as the zero-knowledge Ethereum Virtual Machine (zkEVM). This technological feat allows the Polygon blockchain to support further use cases without sacrificing speeds or costs. 

Without getting too technical, zkEVMs make Polygon more versatile to support not only new smart contracts but even old smart contracts that were originally written on Ethereum. These zkEVMs allow developers to migrate their Ethereum-based smart contracts to Polygon's blockchain without having to rewrite any code. Developers might want to do this because Polygon offers those lower fees and faster speeds previously mentioned. In addition, a move to Polygon won't sacrifice any of the highly desired security and decentralization that comes with the Ethereum blockchain.

It is planned that the zkEVMs will be live in early 2023. Timelines in crypto are notoriously unstable -- look no further than Ethereum's merge to proof of stake, which has been delayed multiple times -- but zkEVMs could enable Polygon to reach a new level of usefulness, something that might be worth waiting a few more months for. 

Polygon pairs with Meta

As if the last month wasn't good enough for Polygon, the blockchain garnered attention from one of the most well-known companies in the world. In late July, Disney (NYSE: DIS) announced that its latest round of participants in the Accelerator Program was finalized -- and Polygon was one of them.

In those next few months, an increased number of users might start realizing that Polygon offers a world of opportunities. Just a few weeks ago it was announced by Meta (NASDAQ: META) CEO Mark Zuckerberg that Instagram will unveil NFTs to users in over 100 countries across Asia, Africa, the Middle East, and the Americas. The plan is for NFTs from Solana (CRYPTO: SOL), Flow (CRYPTO: FLOW), Ethereum, and -- last but not least -- Polygon to be compatible with Instagram.

Rather than being a marketplace to purchase NFTs, users will be able to show off and share their digital assets with followers. The NFTs will have basic information like the creator, name of the piece, and the blockchain on which it was purchased. 

This is likely the most exposure Polygon NFTs have ever received. Now that Polygon has a presence in front of Instagram's two billion users, hopefully more users will learn of its lower fees and faster transaction speeds compared to Ethereum.

Disney does crypto

The Accelerator Program is a "business development program designed to accelerate the growth of innovative companies from around the world." As one of six members to be part of this year's class, Polygon receives investment capital, access to co-working space at Disney's creative campus, and mentor support. Disney hopes that eventually a collaboration will come out of these ventures.

Imagine what this could do for Polygon's growth -- and its price. Serving as the blockchain of choice for Disney could propel Polygon to heights that we haven't seen before. When taking into account that zkEVMs are on the horizon, a presence with Instagram is looming, and the possibility of joining forces with Disney -- it almost seems too good to be true.

Despite being down nearly 70% from its all-time high, out of all the other beaten-down cryptocurrencies, Polygon might have the most upside in the entire market. Even if Polygon were to only return its previous high of almost $3, that would present investors with a possible 300% return. Nothing is guaranteed in investing, but if Polygon could reach that price before its associations with Instagram or  Disney and the introduction of zkEVMs, imagine where it could head in the future.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. RJ Fulton has positions in Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum, Meta Platforms, Inc., Polygon, Solana, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $145 calls on Walt Disney and short January 2024 $155 calls on Walt Disney. The Motley Fool Australia has recommended Meta Platforms, Inc. and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In just 13 years, Bitcoin (CRYPTO: BTC) went from trading for just a few pennies to nearly $69,000 at its peak. Even though the world's original cryptocurrency is only worth about $21,000 today, many are optimistic that Bitcoin will rebound. 

These hopeful price predictions use varying methods and different reasoning for their estimates. For this evaluation of Bitcoin's future price, we will focus on the patterns between halving events and use the year 2024 as the deadline, since that is when the next Bitcoin halving should occur.

Halving events are what helps make Bitcoin so unique. Bitcoin's code is programmed to ensure that the growth in supply falls with time. Since Bitcoin's code is open source, we can do a little math and find out that Bitcoin's block reward is cut in half every 210,000 blocks -- or roughly every four years.

The halving events serve as an easy marker to track the progression of Bitcoin's price. Bitcoin analysts refer to the time between each halving as a cycle. 

Bitcoin's first halving was in November 2012 and dropped the block reward from 50 Bitcoins to 25. The second was in the summer of 2016. And the most recent was in May 2020, resulting in the reward being cut from 12.5 to 6.25 Bitcoins.

A little data exploration never hurt

When looking at the data between halvings, a few things become evident. First, the price at each halving is roughly 55% less than the all-time high from the previous cycle.

Before Bitcoin's first halving, the price topped out near $34 in June 2011. By the time of the November 2012 halving, Bitcoin was worth just about $12 -- a drop of just over 60%. At the 2016 halving, Bitcoin was worth around $650. This was about a 45% decrease from Bitcoin's previous all-time high of around $1,200 in November 2013.

A similar situation occurred at the halving in May 2020. Back then, Bitcoin was worth about $8,800 -- nearly 65% less than the December 2017 all-time high. When averaging those decreases, we discover that on average, Bitcoin's price is about 55% less than the previous all-time high when the halving occurs.

The next halving is set to take place around May 2024. Simple math can help us arrive at a possible price that Bitcoin will reach by then. In the current cycle, Bitcoin peaked at almost $69,000 in November 2021. So, based on past behavior, Bitcoin's price should be about 55% less than that. This implies a price of about $30,000 if past patterns continue at the time of the next halving.

Another insight we can gather from data is that the amount Bitcoin increases in between each halving diminishes from the previous cycle. 

Bitcoin was trading at about $11 at the time of the first halving in November 2012. It then peaked in December 2013 to about $1,100 -- an increase of almost 10,000%. From the next halving in July 2016, Bitcoin's price rose from around $650 to a new high in December 2017 of just under $20,000 -- almost a 3,000% gain. From the most recent halving in May 2020, when it was trading for about $9,000 to the all-time high of just under $69,000 in November 2021, Bitcoin increased by about 670%.

It becomes further evident that Bitcoin's returns diminish with each halving cycle that passes. But how much will the price increase after the next halving? 

On average, Bitcoin returns about 25% less with each new cycle. Subtracting a quarter from the previous 670% return, we arrive at about a 500% increase. A gain of this size from our speculative $30,000 price in May 2024 price would imply a new all-time high of almost $150,000.

The bigger picture

We could speculate on Bitcoin's price until the last Bitcoin is mined sometime after 2100. Regardless of what the actual price becomes, there is one clear trend that has held true: Those who hold Bitcoin longer are rewarded with better returns as each halving passes. 

Investors who bought Bitcoin after the May 2020 halving likely haven't seen great returns. To maximize potential returns, the data show us that Bitcoin should be held for at least one halving. Although recent weakness in Bitcoin caused every portfolio to take a hit, current prices should be viewed as an opportunity to increase exposure before the next halving in May 2024.

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

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Crypto is struggling, but one high profile investor thinks there is more to it.

Mark Cuban has become renowned for his successful venture capitalist career in the early 2000s. He invested in some of the first social networks and software to come around and has since seen his net worth climb to nearly $4.7 billion.

Since he's no stranger to innovative technologies, it comes as no surprise that Cuban has been a vocal advocate for what cryptocurrency and blockchain technology has to offer. He made headlines in 2021 when his National Basketball Association basketball team, the Dallas Mavericks, said it would accept Dogecoin for merchandise and tickets.

Cuban is more than just a fan of Dogecoin. He considers himself an Ethereum maximalist, which means he believes in Ethereum more than other blockchains. He has also made plenty of purchases in the NFT (non-fungible token) market.

While his investments, like many others, are worth considerably less than just a year ago, Cuban remains optimistic about the direction crypto is headed.

Cuban's thoughts

Despite the recent pullbacks and talk about a crypto winter, Cuban believes this decline in prices is healthy and necessary to weed out weak competitors in the crypto economy. In a recent interview he said that the recent bull market fostered an environment for companies that didn't actually have "valid business prospects" to stick around longer than they should have. He made reference to a famous Warren Buffett quote that seems fitting, "When the tide goes out, you get to see who is swimming naked."

Given current macroeconomic factors like inflation, rising interest rates, and the slowing economy, it makes sense that the blockchains and cryptocurrencies that have failed to provide any real-world value would suffer the most.

In addition, events in the crypto market that have recently transpired have only added to the less-than-ideal macroeconomic factors. When the Terra blockchain imploded in early May as the result of its UST stablecoin losing its peg to $1, it caused a widespread market sell-off.

And just last week, one of the most popular crypto lending platforms, Celsius, announced that it would halt withdrawals as the result of the poor economic conditions. This announcement sent all cryptocurrencies down even more.

Yet despite all of this, Cuban still thinks there is hope and value for crypto over the long haul. Specifically, he believes bear markets force companies to innovate. Cuban elaborated, saying, "Disruptive applications and technology released during a bear market, whether stocks or crypto or any business, will always find a market and succeed."

A final thought

Mark Cuban has seen his fair share of bear markets. It seems that in his opinion bear markets should be a cause for concern but not a cause for hysteria. 

Bear markets create opportunities for blockchains and investors alike. Cryptocurrencies that continue to develop innovations in a bear market position themselves for long-term success. 

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

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 Meta's (NASDAQ: FB) social media apps will soon be home to NFTs based on the Solana (CRYPTO: SOL) network, unlike Twitter, which only supports Ethereum-based NFTs. For a blockchain with so much potential, it is encouraging to see one of the world's largest tech companies recognize its utility. 

Rather than being an NFT marketplace like OpenSea or Foundation, the social media apps will serve as a gallery to show off NFTs. Creators will be able to categorize their posts as NFTs and add additional information like where to buy the NFT, what blockchain it is based on, and how much it is going for. Those scrolling past the NFTs can then access these details if interested in purchasing.

The exposure that Solana will receive through this integration is a first for the blockchain. It is a leader among the so-called Ethereum Killers, but aside from lesser-known DeFi use cases, Solana has been unable to tap into the mainstream view. 

Now Solana has the chance to prove its worth to nearly 4 billion users across Instagram and Facebook. 

The state of Solana NFTs

The timing really couldn't have been better. As of recently, Solana NFTs have been soaring in popularity and price. The monthly volume of Solana NFTs has increased significantly. Between February and April, sales volume tripled.

Despite Solana NFTs being available on marketplaces like OpenSea and Rarible, Magic Eden is currently the most popular marketplace for them. More and more collectors are discovering this new marketplace. Before late February, there had never been more than $25 million of volume on Magic Eden. By the end of April, there was nearly $75 million in volume traded on the marketplace.

Recent NFT projects like Okay Bears and DeGods have helped catapult Magic Eden and Solana-based NFTs into the spotlight. 

The launch of Okay Bears put up historic numbers. Within 24 hours of minting, Okay Bears generated $18.4 million in primary and secondary sales. That was more than any other NFT for that day. Currently, Okay Bears sits in the top ten for all NFT projects on OpenSea in the last 30 days. It has outpaced more famous projects like CryptoPunks, Meebits, and Bored Ape Kennel Club in the same time frame.

More than welcome news

As more exposure comes with the Instagram and Facebook integrations, Solana may have finally turned a corner to put its slightly suspect past behind it. Unfortunately, in the last 12 months, Solana has suffered from a handful of network outages. 

In September 2021, Solana was down for about 17 hours. It had another outage in January of this year. And just last month, the blockchain was down for nearly seven hours due to malicious bots overriding the network. There are solutions being implemented to mitigate this in the future, but the track record is anything but perfect. 

Surprisingly, these outages have not deterred Meta. It seems Meta is aware of the potential Solana brings to level the NFT playing field. 

Despite being the most popular NFT blockchain, using Ethereum is costly when minting, buying, or selling NFTs. Users of Solana, on the other hand, will realize that the cheaper fees and faster speeds will help keep more money in their pocket. The Instagram and Facebook launch should expedite that realization in the coming months.

Solana investors should be thrilled with these new advancements. Solana has been one of the more popular DeFi blockchains, but most of those applications stay out of the public's view. The integration on Instagram and Facebook will propel Solana into a new stage of its development and place it among the NFT blockchain heavyweights. 

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

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RJ Fulton has positions in Ethereum and Solana. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum, Meta Platforms, Inc., Solana, and Twitter. The Motley Fool Australia has recommended Meta Platforms, Inc. The Motley Fool Australia owns and has recommended Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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On April 27, The Central African Republic's parliament voted unanimously to make Bitcoin (CRYPTO: BTC) legal tender. Unless you are familiar with your geography or keep up with politics in central Africa, this might be your first time even knowing such a country exists. The Central African Republic is now the second country to do so in the last year. El Salvador was the first country to recognize Bitcoin as legal tender in June 2021. 

Reasoning behind the law

Understanding the Central African Republic's history helps clear the air on potential motives for this decision. The country is a former colony of France. Many of these former colonies still rely on the governments and financial institutions that once ruled them. 

The Central African Republic uses the CFA franc. This currency is used by six other countries within the region and pegged to the euro. To maintain this peg, the Bank of Central African States (BEAC) who oversees these six countries' banking and financial policies is required to keep at least 50% of its foreign assets in the French treasury. 

Some believe this has limited economic development in the country. An embrace of Bitcoin will sever dependence on the euro and their former French colonial power. 

Bitcoin offers a way out

Countries that use currencies tied to Western economies have little to no say in economic policy. This is one of the main reasons why El Salvador made a similar move. Policies enacted in the U.S. or France eventually trickle down and negatively impact these countries' economies. 

International economic policy tends to be decided by countries with the wealthiest economies. Naturally, these policies favor their own domestic interests. Smaller economies are left on the periphery and forced to deal with the hand they are dealt. 

Now there is a way out. Bitcoin levels the playing field. Because Bitcoin cannot be manipulated or controlled by a governing authority, smaller economies can make their own policies without needing consent from other world powers. Governments will no longer be able to control the money supply. Countries that once got the short end of the economic stick can now control their own financial destiny.

Invest in history

Only time will tell how these countries fare. Yet as investors, we should see the bigger picture. The year is 2022. The second country just adopted Bitcoin. Other countries in similar situations like El Salvador and the Central African Republic will notice that Bitcoin is an exit from the status quo.

Critics of Bitcoin will argue only small countries are the ones using the cryptocurrency. And for now they are right. But to even utter those words shows how far Bitcoin has come. The day when a developed economy in Asia, the Middle East, or the West enacts similar Bitcoin laws like El Salvador and the Central African Republic will be the day when Bitcoin undoubtedly cements itself. 

Investors should know that this day is coming sooner than later. You don't have to look far to find examples of this progress. In Colorado citizens can pay taxes in Bitcoin. In Arizona, legislation was introduced to make Bitcoin legal tender.  Take the opportunity now to gain exposure to Bitcoin. Ignore the short term price fluctuations. 

A quote from a personal favorite book, The Alchemist, seems fitting. "Everything that happens once can never happen again. But everything that happens twice will surely happen a third time." 

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

The post Another country adopts Bitcoin as legal tender. What does this mean for investors? appeared first on The Motley Fool Australia.

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

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

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• US$10,000 invested in Bitcoin at the start of the year is now worth…

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

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

The rise of Bitcoin (CRYPTO: BTC) over the last decade has led high profile financial luminaries to expose their stance on the burgeoning asset. Cathie Wood, CEO of Ark Invest, is one of the most vocal supporters. Her investment firm catapulted into the spotlight in 2020 as a result of the success of the Ark Innovation ETF (NYSEMKT: ARKK). 

In one of the most bullish estimates around, the firm called for Bitcoin to reach $500,000 by 2026 just last September. Even better, she recently doubled down in January when she predicted that one Bitcoin would be worth $1,000,000 or more by 2030. 

What is she thinking?

For Bitcoin to reach a $1,000,000 price tag it would need to go up nearly 2,000% in a little under eight years. This doesn't look too crazy when considering it is up about 3,500% since 2017. If Bitcoin is to reach these levels, much has to change and current trends must amplify. 

Cathie Wood and her firm arrived at these estimates after composing multiple research papers that took one of the most comprehensive, in depth evaluations on the current and future state of Bitcoin. This research highlights a multitude of macro and microeconomic factors that led Cathie and her team to the million dollar hypothesis.

At a recent interview in Miami at the Bitcoin Conference, Wood was questioned for the first time about her reasoning. A few of her key points stood out.

Bipartisan Bitcoin

Of most importance was Bitcoin's new-found political support. She referenced Janet Yellen (Secretary of the Treasury) and Gary Gensler (Chairman of the SEC) in particular. Wood credited Gensler as the driving force behind the 180 degree turn of Yellen's previous anti-crypto sentiment. She thinks Gensler will have more success persuading other politicians due to his background as an MIT cryptocurrency professor. 

She surmised that Bitcoin will become a hot topic for voters in upcoming elections. Wood claimed that it wouldn't surprise her if political candidates ran entire campaigns on supporting Bitcoin and crypto in general. In her typical candid fashion, Wood laughed that when considering how wide the political divide has become recently, of all things, Bitcoin now has bipartisan support.

Widespread adoption

Another topic was the increased accessibility of Bitcoin in the United States. Wood directly referenced the innovation and integral role of Bitcoin's Layer 2 scaling solution, the Lightning Network, for bringing more users to Bitcoin domestically. Payment apps like CashApp have utilized the Lightning Network to onboard millions of users to the Bitcoin network.

In general, Wood believes there is "an incredible number of use cases and Bitcoin is leading the charge." Opportunities abound for Bitcoin to be used as a hedge against government manipulation of currencies in developing markets. She thinks that more high net worth individuals will use Bitcoin as an insurance policy against their wealth being confiscated by governments. And lastly, just like her firm, she said that institutional investors will continue purchasing Bitcoin slowly but surely. 

Trust the professionals

Ark Invest has done its due diligence, and just like Babe Ruth, Cathie Wood has called her shot. Their business model depends on them being right about these kinds of things. 

Let's say Cathie Wood is only half right, or a quarter right. If Bitcoin were to rise to those prices it would still be one of the greatest appreciating assets of our generation. Short term price fluctuations for Bitcoin do not matter in the grand scheme of things. The year 2030 will be here before we know it and that fits perfectly into the age-old investment strategy of buy and hold. 

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

The post Bitcoin could be worth $1,000,000 in 2030 appeared first on The Motley Fool Australia.

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

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

More reading

• US$10,000 invested in Bitcoin at the start of the year is now worth…

RJ Fulton owns Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

OpenSea, the world's largest non-fungible token (NFT) marketplace, announced that it will list Solana (CRYPTO: SOL) based NFTs on the site this April. Currently only NFTs on the Ethereum (CRYPTO: ETH) blockchain are available on OpenSea. 

Solana has made a name for itself in the last year. Despite a recent pullback of more than 40% from an all time high in November 2021, this "Ethereum Killer" rebounded out of a four month slump thanks to some impressive news.

To date, this will be the most significant utility Solana has supported in the NFT marketplace. Solana will be put to the test against Ethereum, one of its main competitors. If users begin to take note of Solana's low fees and lightning fast speeds, it may position the cryptocurrency to return to all time highs. 

Back to the top

This is welcome news for a blockchain that suffered from more than a few poor headlines in late 2021. The Solana network was down three times as the result of inordinate traffic on the blockchain. Something Solana developers claimed the network could handle. These events caused the price of Solana to crash.

Solana now has the chance to showcase its utility and leave that news in the past. Since its launch in April 2019, it has built a reputation as one of the fastest and cheapest blockchains out there. Contrastly, using the Ethereum network for NFTs can be costly for users. During times of increased network traffic, there are high fees when users create or purchase NFTs. The Solana network boasts speeds of up to 65,000 transactions per second for fractions of a penny. That is roughly 4,000 times faster than Ethereum and exponentially cheaper.

DeFi developers are well aware of these perks on the Solana network. To quantify the utility of the Solana ecosystem, we can use the total value locked (TVL) statistic. Total value locked is a sum of all assets a blockchain supports in DeFi protocols. It is represented as a dollar amount. A large TVL indicates that a blockchain offers unique utility that attracts developers and money. Currently, the blockchain has the fifth largest TVL among competitors. A slight pullback from fall of 2021 when Solana rose to as high as third. Solana is no stranger to the top and it may return to those heights. 

What's the opportunity?

Solana now has direct exposure to the busiest and most prominent NFT marketplace. In just the month of January, there was nearly $5,000,000,000 in volume traded on OpenSea. It was also reported in the same month that the platform surpassed one million wallets, or users. The next largest platform, Rarible, has just under 100,000 wallets. OpenSea will help Solana gain exposure to millions of digital artists, investors, and NFT collectors. If all works out, this new found exposure should bode well for the price of Solana.

Another milestone for Solana

But now the blockchain is at a crossroads. It must prove to users that the bugs that led to the network outages are a thing of the past. This crossroads presents an opportunity for investors. The latest news and price support Solana has found should garner considerable attention. Keep an eye out for this Ethereum opponent to capitalize on a historic opportunity. 

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

The post Solana makes another leap appeared first on The Motley Fool Australia.

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

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

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RJ Fulton owns Solana and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Ethereum and Solana. The Motley Fool Australia owns and has recommended Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.