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Is It Too Late To Invest In Ethereum?

ether (CRYPTO: ETH) has had a phenomenal year in which the price has risen by almost 700% in the past 12 months. It’s also surpassed Bitcoinwhich “only” increased by around 177% last year.

However, all of this growth also comes at a higher price. Ethereum is one of the most expensive cryptocurrencies on the market and currently costs more than $ 4,100 per token. It also hit an all-time high of over $ 4,800 per token last month and is now back on the uptrend after a tough few weeks.

If you are eager to invest in Ethereum but have not yet had the opportunity to do so, the best opportunity to buy may not appear to you right now. Investing now will buy Ethereum at one of the highest prices of the year.

Does that mean it’s too late to buy? Not necessarily.

Image source: Getty Images.

Where is Ethereum going in 2022?

Of course, it’s impossible to predict exactly how a stock or cryptocurrency will perform in the future, since past returns don’t necessarily predict future performance. But there’s a big reason 2022 could be even better for cryptocurrency.

Ethereum is currently in the transition to an updated version, Ethereum 2.0, and the rollout is expected to be completed in the next year. This upgrade includes switching from a Proof of Work (PoW) mining protocol to a Proof of Stake (PoS) system, which makes Ethereum both faster and greener.

Using a PoW protocol, crypto miners verify transactions with powerful computers that solve complex puzzles. Not only is this a slow process, but it also uses a tremendous amount of energy.

A PoS system is used to validate transactions made by users who risk part of their crypto holdings to earn rewards. This process is significantly faster and requires around 99.95% less energy than a PoW protocol.

Once the rollout of Ethereum 2.0 is complete, Ethereum will have a serious competitive advantage over other cryptocurrencies. Not only will it be faster and more efficient than Bitcoin (which still uses a PoW protocol), but it will also be able to compete with newer cryptocurrencies, such as Solana and Cardano who already use a PoS protocol.

Is Ethereum Right For You?

Next year could be a big year for Ethereum, and investing now can be a smart move. However, Ethereum (and cryptocurrency in general) is not the right investment for everyone.

While Ethereum’s future looks promising, there are no guarantees that it will fare well in the long run. Cryptocurrency is still highly speculative, and whether it can be a solid long-term investment is still up for debate. Its future is particularly uncertain as the legislature is taking action against crypto with stricter regulations.

Before buying, consider your risk tolerance and only invest money that you can realistically afford to lose in the event Ethereum is unsuccessful. Also, be prepared to make your investment long-term. Despite its recent record highs, Ethereum is still experiencing a lot of short-term volatility. There will likely be more ups and downs when Ethereum 2.0 hits the market. So don’t go into this investment with the expectation of getting rich overnight.

Ethereum had a great year, but the best may be yet to come. If you haven’t invested yet, it’s not too late – just make sure you are willing to take the risks that come with buying cryptocurrencies. While there are never guarantees when it comes to investing, Ethereum may have a bright future ahead of it.

This article represents the opinion of the author who may disagree with the “official” referral position of a premium advisory service from the Motley Fool. We are colorful! Questioning an investment thesis – even one of our own – helps us all reflect critically about investing and make decisions that will help us get smarter, happier, and richer.

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