Cryptocurrency is the hot, new trend for some investors
It’s a hot new buzzword for investors, but is cryptocurrency here to stay?
Staff video, USA TODAY
There are a few good reasons why Bitcoin (CRYPTO: BTC) gets a lot of attention from crypto investors. For one thing, it was the first cryptocurrency. And second, its value has reached meteoric highs, with a gain of more than 300% over the past year.
Finding the next Bitcoin has become the primary focus for some crypto investors, and for them, I propose that they turn their attention to Ethereum (CRYPTO: ETH). There’s no guarantee that Ethereum will reach the same value as Bitcoin, of course, but there are several important reasons why this crypto and its underlying technology could make it just as critical to the crypto space as Bitcoin – if not more so.
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1. Its value has skyrocketed very quickly
One thing that’s made Ethereum similar to Bitcoin is the cryptocurrency’s rapid rise in value. As of this writing, one Ether coin is worth nearly $4,600, a 900% increase over the 12 months.
There’s no way to know if Ethereum will ever surpass Bitcoin’s value, but the important thing to remember is that as more investors apply value Ether, the more it becomes a highly established crypto in the mold of Bitcoin.
And with more than 9,000 cryptocurrencies now available to investors, Ethereum becoming an established token has helped to set it apart from the rest.
2. The Ethereum blockchain is helping to create brand new markets
The value of an Ethereum’s coin has grown, at least in part, because the Ethereum blockchain has become the standard for building decentralized finance (DeFi) apps and systems.
DeFi could bring big changes to the financial world, because it gives more control to individuals to borrow, save, and trade assets – all without needing a middleman like a bank or financial institution.
Developers have flocked to the Ethereum blockchain to build DeFi apps (or dApps) for everything from sending money around the world to trading crypto tokens and even buying insurance.
One such new market that’s built on Ethereum – and that’s expanding quickly – is non-fungible tokens (NFTs). NFTs can be any digital asset, from music to images, and many of the largest NFT marketplaces are built using Ethereum.
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3. Ethereum’s developer community is massive
Size matters when it comes to getting a technology off of the ground, and Ethereum’s got the largest developer community of all the blockchains out there.
Ethereum has an average of 2,300 developers working on its blockchain every month – up more than 200% over the past three years.
This has given Ethereum a unique advantage over other blockchains and helps bring value to its token. The larger the developer community, the more updates it gets, and the more trusted it becomes. In turn, growing community trust should draw in more developers, giving the flywheel of accelerating growth another spin.
Ether’s growth trajectory looks good
It’s impossible to know for sure if Ethereum will become bigger than Bitcoin, but for all the reasons above it has clearly become a top crypto name for investors to consider. That being said, investors should know that the crypto market can be highly volatile, so proceed into any crypto purchases with eyes wide open.
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