The last year was difficult for cryptocurrency and those who have it. Investors fled risky assets in the face of economic uncertainty and looked for safer investments. Since 2023, things have looked brighter for cryptocurrency.
All cryptocurrencies have a global market value that has increased from $800 billion at the end of 2022 to $1.1 trillion today. Although general economic woes may not be over, it is easy to see that many players in the crypto market have excellent long-term prospects. Ethereum (HTML3_ -3.47%) is an excellent example. It’s also the only cryptocurrency I would buy right now.
The most popular blockchain among developers
After Bitcoin, Ethereum is the second-largest cryptocurrency in terms of market capitalization. It is already a leader, from decentralized apps (DApps), to nonfungible token sales (NFT). According to an Electric Capital report, more than 5,000 developers have created applications using Ethereum. This makes Ethereum the top-ranked blockchain for developers among all the thousands of available. Ethereum is also No. CryptoSlam data shows that Ethereum is the No. 1 NFT seller.
The Merge, an upgrade to Ethereum that improved the blockchain’s performance, was completed last year. It switched from proof of work to proof-of-stake as the transaction validation method. This reduced Ethereum’s energy consumption by over 99%. This gave Ethereum holders the chance to earn passive income by investing in tokens.
Validators will be able to withdraw staked assets and receive rewards as part of a new upgrade, dubbed Shanghai. It is scheduled for March. Staked assets must be kept on the network until then. The price of Ethereum may drop if there are a lot of withdrawals. However, investors will continue to flock to Ethereum’s stakes as the move to allow withdrawals is a positive. This is a positive.
Transactions are faster and more affordable
Upgrades are still possible. Ethereum’s future could be a catalyst for growth. In the next year, the blockchain plans to implement sharding. This is done by dividing up a database horizontally. This allows for more work and less congestion. This should result in faster and more affordable transactions.
This fixes Ethereum’s biggest problem: it is slow and costly. It could process more than 100,000 transactions per second with sharding. This is compared to 30 transactions per second today.
Ethereum is today’s top cryptocurrency player. However, upcoming upgrades will likely make it even more attractive for investors and users.
Let’s now look at the price. The entire cryptocurrency market plummeted last year, and Ethereum lost over 67%. The token’s value has risen by 37% so far this year.
It’s a great time for Ethereum to be a part of the story. It fell to bargain levels in 2022 and is now showing signs of recovery. Over the long-term and in the present, its upgrades will keep it at the top of the game. The price drop in Ethereum last year wasn’t caused by the cryptocurrency, but rather investors’ preference for safer assets during that time. This makes Ethereum an asset I would be quick to buy.
Do you want to invest $1,000 in Ethereum now?
This is what you need to know before you start thinking about Ethereum.
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Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
