The crypto market is off to a terrible start this year. Several factors weighed on market performance as investors sought safer bets. However, the long-term investment case for cryptos such as Ethereum (ETH-USD) remains the same. ETH-USD is arguably the best crypto investment with a long list of unparalleled use cases.
The consensus among financial experts was that crypto could challenge traditional investments. Crypto adoption has grown by more than 100% in the past two years, and if this continues, there could be over a billion crypto users. Moreover, institutional investments in the sector are also growing at a steady pace, adding billions to the market capitalization of the industry.
Ethereum is in pole position to capture the rapid growth of the sector in the years to come. It has the security and decentralization to enable a range of emerging services such as Web 3.0, DeFi and others. ETH-USD offers the best risk/reward opportunity in the industry and remains a fascinating long-term crypto bet.
Ethereum offers investors the best exposure to the growth of some of the most lucrative crypto sectors. Three main sectors will support the development of crypto investments for the foreseeable future.
First, we have Web 3.0. Unlike its predecessors, in Web 3.0 you can create your content and own it and benefit from its durability. It essentially breaks the centralized model of the internet, thereby democratizing itself for its users. Cryptocurrencies allow a more direct connection between creators and their content.
Another niche that stems from the Web 3.0 concept is non-fungible tokens (NFTs). NFTs can be anything from art, video images, collectibles, and other items, representing ownership of a specific item on a blockchain.
The NFT market has grown from $340 million in 2020 to over $13 billion last year. Ethereum currently dominates this space and represents the best way to take advantage of the rapidly growing market.
In addition, we then have smart contracts and decentralized finance, which can revolutionize financial markets. Smart contracts effectively eliminate the middleman, working much faster than legacy transactions.
Everything is clear in the code and reduces the impact of third parties to streamline the process. DeFi protocol revenue exceeds $5 billion, but could be worth 100 times more than today in the next five years.
The future of ETH-USD
Ethereum failed to sustain colossal user demand. In response to its massive user base, it made relevant changes to its network as part of a multi-phase upgrade.
The Beacon Chain upgrade went live recently and allows users to corroborate transactions using a proof-of-stake (PoS) system. By staking their holdings, transactions can be validated economically and with more energy efficiency.
There are a few more improvements coming next year. The first of these upgrades is to dramatically improve Ethereum’s network scalability through sharding.
Adding new nodes to the platform could potentially support thousands of transactions per second. Additionally, the third phase will add greater functionality to partition chains for dynamic communication.
Therefore, with these upcoming updates, Ethereum could further expand its dominance in the industry. It is currently the best investment in the crypto space with the highest upside potential this year.
Moreover, it has an unrivaled list of use cases, cementing its position as a true pillar of the industry. It will take a long time for its peers to catch up, and its latest updates will further extend its supremacy. Therefore, if there is one crypto you should invest in this year, it is Ether.
As of publication date, Muslim Farooque has a long position in Ethereum. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.
Muslim Farooque is a passionate investor and an optimist at heart. A long-time gamer and tech enthusiast, he has a particular affinity for analyzing tech stocks. Muslim holds a Bachelor of Science in Applied Accounting from Oxford Brookes University.