5 things you need to know before buying Ethereum 2022:
If you are considering buying one of the major cryptocurrencies, we explain five things you need to know about Ethereum.
As always with any digital currency, remember that making money is never guaranteed and you may lose all the money you put in.
The second-largest digital currency after Bitcoin:
In the past, you may have seen Ethereum compared to Bitcoin, as both have a lot of similarities.
This includes both being digital currencies stored in crypto wallets, and both are decentralized.
This means that it is not subject to regulation by an authority including the central bank.
But what you probably didn't know is the Ethereum market capitalization in the digital space tracks only Bitcoin.
The market capitalization of Ethereum exceeds $450 billion, while the value of Bitcoin is now estimated at more than $1.2 trillion.
A trading explosion last year:
If you thought last week's gains were impressive - you'll be stunned by what happened in the last year.
During that period, the price of Ethereum increased by nearly 1,000%.
Similarly, Ethereum has been following similar positive trends to Bitcoin, recently.
The recent rally in bitcoin can be attributed to Gary Gensler, the chair of the US Securities and Exchange Commission, who has reiterated his support for bitcoin exchange-traded funds (ETFs).
What distinguishes Ethereum?
Although Ethereum shares some similarities – it does have some notable advantages over Bitcoin, with one of them being quite broad.
Specifically, Bitcoin is just a digital currency, while Ethereum was created as a general-purpose blockchain.
This allows for unlimited smart contract functionality.
Also, Ethereum can process transactions faster on its network compared to Bitcoin.
Additionally, many developers choose to build their software on the Ethereum platform due to the high decentralization.
Risks:
Although Ethereum is the second-largest cryptocurrency, it is still subject to the same risks in the industry.
One of them is high volatility.
For example, Ethereum reached an all-time high of $4,362.35 in May 2021 – but it has remained down 13% so far despite the recent rally.
Besides price volatility, the cryptocurrency sector comes with a lot of complexity, so you need to understand what you are investing in.
Expect price:
Some are wondering where the price of Ethereum will end up in the future – especially now given the recent gains.
And not many forecasters believe that it will take much longer for Ethereum to rise to a new all-time high.
At the end of the year, CoinPriceForecast expects Ethereum to reach $5,646 and $12,578 by the end of 2024.
WalletInvestor has a one-year forecast of $6,394.27 and a five-year forecast of $16,503.80.
But keep in mind that the outlook can change if Ethereum experiences near-term volatility.
