Blockchain
The ultimate cryptocurrency to buy today
Solid fundamentals and promising prospects make it the leading choice.
There are numerous cryptocurrencies worth considering in today’s landscape, but if I had to choose the one with the most upside potential, Ethereum (ET 0.01%) takes the crown.
While Bitcoin (CRYPTO: BTC) typically holds the leading cryptocurrency stock, regardless of market conditions, Ethereum demands recognition and could be an ideal opportunity for investors.
The bottom line
By several fundamental metrics, Ethereum is strong, with solid decentralization and security features second only to Bitcoin. Its extensive track record of features further solidifies its status as a top contender.
But the main reason why Ethereum is my choice as the ultimate cryptocurrency to buy today has to do with the gap between its current price and its all-time high. In April 2021 it reached a price of over $4,600. Today it trades at around $3,100, providing an opportunity to capitalize on a 40% rise should it regain its former glory.
Being below its all-time high does not automatically make it a worthy investment, but the substantial gap from its peak value is particularly attractive due to promising future events. One of these is the potential approval of an Ethereum ETF by the Securities and Exchange Commission.
The next cryptocurrency ETF?
Following the approval of Spot Bitcoin ETF, Ethereum ETFs appear to be the next logical step in the convergence of traditional finance and cryptocurrencies. With its own ETF, Ethereum would open up to a broader investor base in the stock market, injecting new capital and potentially driving its price higher.
There is some concern about when the approval will occur because government agencies have difficulty classifying Ethereum as a security or commodity, like Bitcoin. If it’s a stock, the chances of approval seem unlikely.
But given comments from the chairman of the Commodity Futures Trading Commission that Ethereum is a commodity, coupled with the growing appetite of investors seeking exposure to it, approval should come one day. And if it does, it could add new demand as Wall Street tries to get its hands on the world’s second-most valuable cryptocurrency.
The future of finance
Another attractive factor of Ethereum is its key role in the future of tokenization, which involves digitizing real-world assets such as real estate, stocks, bonds and other financial instruments and representing them as digital tokens on a blockchain.
Analysts predict the tokenization market will be worth $10 trillion by 2030. With its sophisticated smart contract capabilities (the foundation of tokenization assets), as well as its proven security and decentralization, Ethereum is positioned to become the blockchain preferred for tokenization projects.
This shift towards tokenization could revolutionize traditional financial markets, offering greater efficiency, transparency and accessibility. Black rock CEO Larry Fink says tokenization will be “the next generation for markets.” And it appears that BlackRock, the world’s largest asset manager, is putting its money where its mouth is Fink, launching a tokenized money market fund on the Ethereum blockchain in late March.
The undisputed champion of DeFi
Although the future of Ethereum looks bright as it begins to be leveraged in new and innovative ways, blockchain currently dominates one of the primary sectors of cryptocurrencies: decentralized finance (DeFi). Bursting with potential, the DeFi economy is made up of non-fungible tokens, stablecoins, and more. While Ethereum is not the only blockchain offering DeFi functionality, it is the undisputed leader.
Today, approximately 60% of the value of the DeFi economy calls Ethereum, making it an ideal proxy for investors to gain full exposure to the growing potential of the sector. The DeFi landscape is often described as highly competitive, but the reality is that cryptocurrencies remain the undisputed champion. With its clear plan to introduce upgrades and increase its capabilities, Ethereum will likely widen the gap separating itself from competitors in the years to come.
Ethereum is one of the main cryptocurrencies on the market. With several catalysts on the horizon, it has short-term appeal along with serious long-term potential, making it the definitive cryptocurrency to invest in today.
RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.