Is Ethereum Stock a Good Investment in 2022 | The Motley Fool (2023)

Ethereum (CRYPTO:ETH) is the decentralized, open-source technology that powers much of the crypto world. Everything from decentralized finance (DeFi) applications and non-fungible tokens (NFTs) to enterprise blockchain solutions relies on Ethereum's technology.

Ethereum's native token, Ether, is the second-largest cryptocurrency after Bitcoin (CRYPTO:BTC). The Ethereum Merge, the network's long-awaited shift to a proof-of-stake system, is expected to make the technology remarkably more energy-efficient. The Ethereum Foundation has predicted the shift will cut energy usage by around 99.95%.

If you want to profit from the growing use of Ethereum, there are several ways you can invest. The most direct option is buying Ethereum itself. Because it's extremely volatile, this carries the greatest risk but also the greatest potential profits. Another option is buying Ethereum stocks, including managed funds that invest in Ethereum for you and companies with large exposure to Ethereum technology.

Is Ethereum Stock a Good Investment in 2022 | The Motley Fool (1)

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What is Ethereum?

Ethereum is an open-source blockchain technology in the form of software. Software developer Vitalik Buterin originally proposed the idea in 2013, and Ethereum launched in 2015.

Any developer making an application that would benefit from blockchain technology can build it on the Ethereum network. While Ethereum is most associated with its native Ether token and other cryptocurrencies, its technology is also enabling widespread innovation in industries as diverse as insurance, logistics, and healthcare.

Developers write programs on Ethereum using self-executing, self-enforcing protocols called smart contracts, which are deployed to Ethereum-powered blockchains. The blockchain's network of computers executes the smart contract by performing specified actions when the conditions of the contract are met. Blockchain data can't be modified after it's created, and that gives users confidence in the technology.

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Although early cryptocurrencies, most notably Bitcoin, are merely stores of value that can be transferred, Ethereum has more uses. If Bitcoin is a smartphone app, Ethereum is more like the device maker. Ethereum's cryptocurrency benefits from its technology because transaction fees for decentralized applications on its blockchain are paid in Ether.

What is the Ethereum Merge?

The Ethereum Merge is the term for the network's switch from its original proof-of-work system to a proof-of-stake system, scheduled to occur in mid-September 2022.

When Ethereum launched, it used proof of work, the same system used by Bitcoin, to validate and record transactions. A notable drawback of this system is extremely high energy usage, which has led to Bitcoin using more power per year than some entire countries.

In 2020, Ethereum introduced the Beacon Chain, a proof-of-stake network. However, it continued using its original proof-of-work mainnet for processing transactions. The Merge is when Ethereum will combine the Beacon Chain with the mainnet and make the transition to proof of stake.

The primary benefit of The Merge is energy efficiency. Transaction speeds will change a small amount but not enough for most users to notice.

Top Ethereum stocks

Here are the best stocks to buy if you want to add Ethereum to your portfolio:

1. Grayscale Ethereum Trust

The Grayscale Ethereum Trust (OTC:ETHE) is a managed fund that makes it easy to add Ethereum to your brokerage account. Each share is backed by a fixed amount of Ether tokens (approximately 0.01 Ether per share).

Keep in mind that the fund's share price is often lower than the value of Ethereum at the prevailing conversion rate. Grayscale also charges a somewhat expensive annual management fee of 2.5%. Shareholders can't exchange shares for Ethereum, so there's no price arbitrage opportunity.

2. Bitwise Ethereum Fund

Bitwise is the world's biggest crypto index fund manager. It offers managed funds for multiple types of cryptocurrency, and one option is the Bitwise Ethereum Fund.

The fund is available to accredited investors and has a minimum investment of $25,000. The fund's managers seek to minimize transaction costs, and they hold the fund's Ethereum offline in cold crypto storage, making it a cost-efficient and secure Ethereum stock. There's an annual management fee of 1.5%.

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If you want a more diverse digital asset portfolio, check out the Bitwise 10 Crypto Index Fund (OTC:BITW), which includes a mix of several of the top cryptocurrencies.

3. Coinbase

Coinbase (NASDAQ:COIN) is the largest cryptocurrency exchange in the U.S. The company charges transaction fees to buyers and sellers of a wide range of cryptocurrencies, including Ethereum. In addition to Ethereum, many other cryptocurrencies traded on Coinbase use the Ethereum blockchain.

The exchange rolled out Ethereum staking in 2021, allowing investors to lock up their Ether and earn rewards on it during the upgrade to a proof-of-stake system. Coinbase's staking program is expected to significantly benefit from the completion of The Merge. Analysis from Goldman Sachs (NYSE:GS) predicts that Coinbase will generate $250 million to $600 million in additional revenue from Ethereum staking.

4. Staked ETH Trust

The Staked ETH Trust is the first traditional investment vehicle that allowed shareholders to get Ethereum exposure and receive staking rewards. It's open by private placement to accredited investors, with a minimum investment amount of $25,000 and an expense ratio of 1%.

Considering the attention that Ethereum staking is getting from The Merge, the fund could become very popular. The staking rewards allow the trust's underlying Ether holdings to grow about 7.5% annually, helping it to outperform non-staking funds.

The biggest advantage of the Staked ETH Trust is how much it simplifies staking for investors. You invest in it by buying shares, like any traditional investment vehicle, and the staking itself is handled by the fund administrator.

5. Robinhood Markets

Robinhood Markets (NASDAQ:HOOD) may be best known as the discount broker that ushered in the age of commission-free trading. That's not the only way it has been ahead of the game. In 2018, it began offering crypto trading of Bitcoin and Ethereum.

The broker has since expanded its selection to include a few other cryptocurrencies, including Litecoin (CRYPTO:LTC) and Bitcoin Cash (CRYPTO:BCH). Although Robinhood isn't a pure cryptocurrency play, it does offer some exposure to Ethereum.

How to invest in Ethereum

If you want to directly invest in Ethereum, you can buy it through a crypto exchange, a stock broker, or even a payment app that carries it. Since Ethereum is one of the largest cryptocurrencies by market cap, it's available on almost all platforms that sell crypto.

Here are the different types of platforms you can use to buy Ethereum:

  • Cryptocurrency exchanges: The exchanges let users buy, sell, and trade cryptocurrencies. Examples of popular crypto exchanges include Coinbase and Gemini.
  • Stock brokers: Some stock brokers have started selling select cryptocurrencies, with Robinhood being the most prominent example.
  • Payment apps: You can buy and sell crypto, including Ethereum, on PayPal (NASDAQ:PYPL) and Venmo, which is owned by PayPal.

For serious crypto investors, a crypto exchange is usually the best option. Exchanges offer the widest selection of cryptocurrencies and the most features. They also let you transfer your crypto off the exchange to a crypto wallet that you control. Stock brokers and payment apps often don't let you transfer your crypto anywhere.

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Related investing topics:

Cryptocurrency StocksThese technologies serve as the gateway between the digital blockchain and human society.
Fintech StocksCombine finance and technology and you get companies in this space.
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Financial StocksTake advantage of the changing finance industry, and invest in its most promising stocks.

Should you invest in Ethereum?

Ethereum technology is at the core of most blockchain applications. Many believe blockchain will play a significant role in the future of finance and other industries, making exposure to Ethereum technology a potentially profitable addition to your investment portfolio.

The value of Ether as a digital currency is much more volatile and unpredictable than the growth of Ethereum technology. You can mitigate some of that risk and should take steps to guard against hacking, but, ultimately, the value of any investment directly linked to Ether is likely to fluctuate.

Any of the above investment recommendations deserves consideration, especially if you believe that the development of blockchain technology is only just beginning.

Ethereum FAQs

What is ethereum?

Ethereum is a blockchain technology in the form of software. As an open-source technology, it is available to any developer building an application that can benefit from the blockchain method of validation. While Ether and other cryptocurrencies are what Ethereum is mostly associated with, the Ethereum technology is enabling widespread innovation in industries as diverse as insurance, logistics, and healthcare.

What are the best ethereum stocks?

The following is a list of the best stocks to buy if you want to add Ether or Ethereum exposure to your portfolio:

  • Grayscale Ethereum Trust
  • Bitwise Ethereum Fund
  • HIVE Blockchain
  • NVIDIA and AMD

How do I invest in cryptocurrency?

While financial transaction technology was the original idea behind blockchain -- and this has gained early traction among established companies -- crypto assets are being developed to help secure all sorts of things, from medical records to copyright protection to digital identification. Investors could take a position in crypto assets themselves (perhaps buying a small amount of a basket of different cryptocurrencies), but investing in companies that are betting on blockchain and crypto asset uptake is the best way to get exposure to the movement.

(Video) Why Ethereum Has Plunged After "The Merge"

Lyle Daly has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Coinbase Global, Inc., Ethereum, Goldman Sachs, and PayPal Holdings. The Motley Fool has a disclosure policy.

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FAQs

Is Ethereum worth investing in 2022? ›

Ethereum is the most well-known altcoin, and it's much more than just another cryptocurrency for many investors and enthusiasts alike. And despite its rough first half of the year, experts predict it could still get back above $4,000 in 2022.

Will Ethereum go up 2022? ›

Based on Ethereum's price history, movements and 2022 market conditions, experts are still optimistic that ETH will rebound in the future, though there will be fluctuations along the way. It is important to remember that the crypto asset market is really volatile.

Is it smart to invest in Ethereum right now? ›

Ethereum is already one of the strongest players in the crypto space, and if this update goes as planned, the future looks even more promising for the network. That could make right now a fantastic time to invest.

Which cryptocurrency is best for long term investment 2022? ›

Polkadot (DOT) With a market cap exceeding $7 billion, Polkadot has become one of the best long-term prospects since its launch way back in 2020. It serves the dual function of being a cryptocurrency as well as a blockchain network allowing developers to build and innovate on decentralized systems.

What will Ethereum cost in 2022? ›

The most bullish analysts predict ethereum could reach over $4,500 in 2022 if an upcoming “Merge” upgrade is successful, according to NextAdvisor.

What will Ethereum be worth in 5 years? ›

Wallet Investor's Ethereum price predictions suggest that the ETH token will be around $5906.10 by 2027. While DigitalCoinPrice indicates that the token will be at a maximum of $3,440.95 in 2025 as per their ETH price predictions.

How much should I invest in Ethereum? ›

Bitwise Ethereum Fund

It offers managed funds for multiple types of cryptocurrency, and one option is the Bitwise Ethereum Fund. The fund is available to accredited investors and has a minimum investment of $25,000.

How high can Ethereum go? ›

Many experts are still bullish, despite the recent slump, predicting ethereum's price could potentially hit and exceed $12,000 this year. Ethereum still had a relatively strong close to 2021. ethereum set a new all-time high when it went over $4,850 on Nov.

Why is Ethereum going down? ›

This year, Ether prices have been depressed ever since the Federal Reserve announced its intention to institute a series of aggressive interest rate hikes in order to combat inflation. High interest rates dissuade consumers from investing in more risky assets, which includes crypto.

Is it worth investing 100 in Ethereum? ›

Investing $100 In Ethereum: A $100 investment in Ethereum today could buy 0.0526 ETH based on the current price. If Ethereum returns to its all-time high of $4,891.70, the $100 investment would be worth $257.30, representing a return of 157%.

Which crypto will boom in 2022? ›

Ethereum. The second largest crypto by market cap is likely to grow in 2022 and 2023, according to crypto enthusiasts. According to some predictions, Ethereum could reach a worth between $8,000-$10,000 by the end of 2022.

How many Ethereum do I need to retire? ›

Now the big question is: How much Ethereum do you need to generate $7,300 per month for the next 25 years, beginning in the year 2025 that would take you from 2025 all the way to 2049. Well, the answer is: 72 ETH — assuming the Ethereum dominance model of 33 % of the total market cap of cryptocurrencies.

Is Cardano better than Ethereum? ›

Ethereum is more valuable. Ethereum has consistently been the second-most valuable cryptocurrency in recent years, after Bitcoin. Cardano, though it has grown in value substantially since its launch, is worth about 10% of Ethereum's total market capitalization.

What is the next crypto to boom? ›

Battle Infinity (IBAT) is a play-to-earn metaverse project that could be the next cryptocurrency to explode in 2022.

Will Ethereum go back down to 1000? ›

ETH To Never Return To Near Or Above $1,000

Bitcoin and other altcoins are still down significantly from their all-time highs, however, most altcoins are down 80% or more, and have also lost significant value in their BTC ratios.

Is Ethereum going up or down today? ›

What is Ethereum price today? Ethereum is down by -0.33%.

How much will Ethereum cost in 2030? ›

What Ethereum price will be in 5 years and 10 years – prediction by years
YearPrice in the middle of the yearPrice at the end of the year
2028$3,738$3,306
2029$3,519$3,730
2030$3,520$3,706
2031$3,891$4,075
9 more rows

What is the long term forecast for ethereum? ›

Ethereum Price Prediction 2022-2023

The forecasted Ethereum price at the end of 2022 is $2,199 - and the year to year change -41%. The rise from today to year-end: +14%. In the middle of 2022, we expect to see $2,375 per 1 Ethereum.

Should I stake ethereum? ›

Moreover, it is a good idea to stake Etherem because it is easier to run a node if you stake it. It doesn't necessitate significant investments in hardware or energy, and you can join staking pools if you don't have enough ETH to stake. Staking takes place in a more decentralized manner.

Will ethereum rise again? ›

In an article by Forbes, it was predicted that Ethereum could reach $19,842 by 2025 (which is 14,88,150 INR approx.) - a 400% increase from its current price.

Will crypto go back up 2022? ›

In Analytics Insight, Sanyal says that market analysts predict that Bitcoin could hit USD $100,000 by the end of 2023, and others say it can climb to the mark in the first quarter of 2022. Others write that Bitcoin won't reach more than USD $70,000 by the end of 2022.

Will Ethereum Make Me a Millionaire? ›

Ethereum may be a strong cryptocurrency, but there are no guarantees that it will succeed. However, if you have a high tolerance for risk and are willing to hold your investment for years despite short-term volatility, you could potentially make a lot of money over time.

Is it worth investing 100 in Ethereum? ›

Investing $100 In Ethereum: A $100 investment in Ethereum today could buy 0.0526 ETH based on the current price. If Ethereum returns to its all-time high of $4,891.70, the $100 investment would be worth $257.30, representing a return of 157%.

How much will Ethereum cost in 2030? ›

What Ethereum price will be in 5 years and 10 years – prediction by years
YearPrice in the middle of the yearPrice at the end of the year
2028$3,738$3,306
2029$3,519$3,730
2030$3,520$3,706
2031$3,891$4,075
9 more rows

How high can Ethereum go? ›

Many experts are still bullish, despite the recent slump, predicting ethereum's price could potentially hit and exceed $12,000 this year. Ethereum still had a relatively strong close to 2021. ethereum set a new all-time high when it went over $4,850 on Nov.

When Ethereum will rise? ›

According to the latest Ethereum price forecast, the price of ETH will reach $2,280 by the end of 2022, rising to $4,679 by the end of 2023 and $7,450 by the end of 2025. Ethereum will then rise to $8,650 in 2027, and $9,567 in 2030.

What cryptocurrency will explode in 2022? ›

Battle Infinity (IBAT) is a play-to-earn metaverse project that could be the next cryptocurrency to explode in 2022. The project sold out its presale recently, 24 days into the 90-day event, raising the amount in total.

How long should I hold Ethereum? ›

For 2022-3 in general, we think recession risks pose a risk to ETH and so now might not be the best time to buy ethereum if you have a medium-term outlook. We think ethereum is a good long-term investment for the next one to three years and are bullish overall. That means we expect prices to rise in the long term.

Which coin can make you a millionaire in 2022? ›

Ethereum. Ethereum is, to date, the most successful altcoin in the digital asset domain. Its native token ETH has soared immaculately since its inception. Currently, investors are waiting for the biggest upgrades in the history of the crypto market, powered by Ethereum Merge.

How many Ethereum do I need to retire? ›

Now the big question is: How much Ethereum do you need to generate $7,300 per month for the next 25 years, beginning in the year 2025 that would take you from 2025 all the way to 2049. Well, the answer is: 72 ETH — assuming the Ethereum dominance model of 33 % of the total market cap of cryptocurrencies.

How much will I make if I invest $100 in Ethereum? ›

Investing $100 in Ethereum (ETH) could bring returns of more than 85.24% in the short term, more than 238.43% in the medium term, and more than 517.47% in the long term.

Is it ok to invest in Ethereum? ›

Investing in Ethereum is risky, but it could potentially be lucrative. Unlike Bitcoin or Litecoin, companies are really using Ethereum as a building block - something more akin to diamonds than gold. As an investor, this is a potential win.

How much Ethereum does the average person have? ›

The average ETH holding per address is ~2.17 ETH. Without the top 10 addresses, the average ETH holding per address is ~1.87 ETH. Without the top 50 addresses, the average holding is ~1.59 ETH [source].

How high will Shiba Inu go in 2025? ›

Shiba Inu price prediction October 2025: Shiba Inu's price for October 2025 according to our analysis should range between $0.000049 to $0.000056 and the average price of SHIB should be around $0.000053.

Will ETH go up or down? ›

Due to this, experts and analysts are both expecting Ethereum projected growth to reach extreme highs. It is currently trading at about $1,200 down from the new peak set in 2021.
...
Conclusion: Is Ethereum a Good Investment and How Much Will ETH Be Worth?
YearPotential HighPotential Low
2024 – 2025$41,000$4,500
3 more rows

How much is ethereum 2025? ›

Ethereum Price Prediction 2025

The experts in the field of cryptocurrency have analyzed the prices of Ethereum and their fluctuations during the previous years. It is assumed that in 2025, the minimum ETH price might drop to $4,197.20024, while its maximum can reach $5,178.82207.

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