Is it worth buying Ethereum in 2024

Is it worth buying ETH? According to most experts, the coin retains the prospect of growth in 2022. Reynaldo Marquez, an analyst of the NewsBTC portal, suggests that after the Ethereum 2.0 update, the price of the asset may increase to $40 thousand. David Greider (Fundstrat Global Advisors) and Michael van de Poppe (Amsterdam Stock Exchange) predict growth to $10 thousand as early as January 2022.

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Andrei Podolyan (Cryptorg) and Sergey Zhdanov (EXMO) agree with them. However, JPMorgan Chase is not sure whether to buy Ethereum in 2024. The holding’s analysts believe that the dynamics of the network and the number of active addresses do not correspond to the current rate of the coin, and its real price is no more than $1 thousand.

The table reflects all price records of ETH in 2021.

Is it worth buying Ethereum now

The London hardfork has dramatically changed the transaction fee model on the Etherium network. Now, instead of traditional commissions, users pay base fee – the minimum amount that allows a transaction to be included in the blockchain. The base fee is recalculated depending on the network’s workload. These coins are burned after the transaction is completed. However, users can speed up the transaction by paying an additional fee – priority fee, which is distributed among miners. Taking into account that ETH issuance is artificially limited by developers, the burning of coins will gradually begin to prevail over generation. This will cause a shortage of cryptocurrency and an increase in its price. According to analysts, the rate of the first altcoin will increase to $10-15 thousand in 2022.

According to the portal, by the end of November 2021, more than 1 million coins, equivalent to $4.2 million, were destroyed in the Ethereum network. The annual volume of burning is 4.3 million ETH, issuance – 5.4 million. With inflation of less than 1%, the supply of etherium will reach a maximum at 119.7 million coins. After that, the asset will become deflationary.

Experts also name other factors that explain why it is profitable to buy Ethereum in 2024:

• Staking (freezing coins on the wallet to earn money using the Proof-of-Stake algorithm) in the blockchain 2.0 version.
• Technical and economic characteristics of the cryptocurrency.
• Increase in capitalization.
• Payment by etherium of commissions in projects created on the blockchain of the first altcoin.
• Global growth of interest in the coin.

Algorithm change and staking

The creator of the Efirium network, Vitalik Buterin, repeatedly stated that the project was conceived as a PoS-blockchain. However, at the time of its launch, this algorithm was being tested, so the developers decided to use the already proven Proof-of-Work. In 2021, the need to replace PoW has increased extremely:

• Due to huge loads on the network, the cost of transactions rose to cosmic values – 0.013 ETH ($54.64).
• Public pressure against dirty mining increased. Efirium is considered a cleaner cryptocurrency than bitcoin (an ETH block contains more transactions and leaves a smaller carbon footprint). But switching to PoS mining will reduce the network’s energy consumption by almost 99%.

The developers promise to complete the activation of Ethereum 2.0 in 2022. The transition plan includes several sequential improvements to the network, some of which have already been implemented.

From December 2020, users can passively earn ETH by placing some of their assets into staking (for now, PoW and PoS algorithms work in parallel). To become a validator, you need to have 32 ETH in your wallet (about $150k as of December 2021). The profit is 15% per year, but you can get it and unlock assets only after the full transition to the new algorithm.

In November 2021, the number of validators in the test network is 262.6 thousand. The deposit smart contract is replenished by 8.75 million ETH ($35.49 billion). This corresponds to 5.2% of the asset’s market supply (118.52 million coins worth $481.43 billion). To fully transition to Proof-of-Stake, 11 million ETH must be raised.

Cryptocurrency Opportunities

The Efirium ecosystem is fully decentralized, not subject to the influence of states and other structures. The flexibility of the protocol allows companies to use it to deploy their own applications.

Most of DeFi’s flagship decentralized finance projects are built on the Ethereum blockchain. According to Chainalylis, this sector of the cryptocurrency economy grew 550% in 2021 compared to 2020 and reached $274 billion by November. Much of this money is locked up in Efirium-based DEX crypto exchanges (Uniswap, Curve and others).

The growth of decentralized trading platforms is accompanied by an outflow of coins from managed platforms. More than 30% of the asset volume is used in DeFi services. The number of centralized exchanges (CeFi) decreased from 845 to 672 over the year. The active development of DeFi contributes to the price growth. Given the high demand for cryptocurrency on decentralized and managed platforms, investing in Efirium is profitable even at the current quotes of the asset.

In September 2021, a former top manager of the bank Goldman Sachs and cryptoinvestor Raul Pal predicted the growth of the main altcoin to $20 thousand. According to the expert, this is facilitated by the development of markets DeFi and NFT. Non-fungible tokens have become the main investment trend in 2021. According to the analytical portal Nonfungible, NFT sales in Q3 2021 amounted to $10.2 billion. This is 107 times more than in the whole of 2020. The brands Gucci, Burberry, Adidas and many celebrities are issuing their unique tokens. Most NFTs are created on the Ethereum blockchain.

Capitalization

Cryptocurrency has no physical collateral, its rate is determined by the ratio of supply and demand. An increase in capitalization indicates the popularity of the asset. Increased demand and limited supply are catalysts for the coin’s growth. In November 2021, the capitalization of etherium is $492.09 million – almost half of the volume of the first cryptocurrency ($1.04 trillion). Ethereum’s current market share is 19.8%.

The issuance of the asset is not limited, but the developers artificially restrain the release of new coins. In November 2021, there are 118.52 million ETH in circulation. After the activation of the London Harfork, 5 coins are burned every minute.

Experts estimate that deflation will come as early as 2022. Some analysts believe that etherium has every chance to catch up with bitcoin in terms of capitalization. Goldman Sachs believes that ETH is better suited to become the dominant digital store of value. Viktor Pershikov (8848 Invest) and Sergey Zhdanov (EXMO) recommend buying Ethereum in 2024 as an investment for the next 3-5 years.

Commissions

In most DeFi protocols and NFTs, transactions are paid with ethereum. The same principle works for many other projects created on the Ethereum blockchain. The activation of the London hardfork has increased user interaction with decentralized systems. Investors and traders no longer need to calculate transaction fees on their own. Now, fixed fees are added to transactions on the network, which can vary depending on the load on the network, but not more than 12.5% in both directions.

The new transaction fee model solves the problem of stuck transfers and increases the throughput of the Etherium blockchain. However, commissions on the network remain high.

This is due to the growing popularity of the DeFi and NFT markets. The network’s inability to handle such a load should resolve itself once the full transition to Etherium 2.0 is complete.

General interest

According to Viktor Pershikov (8848 Invest), etherium looks stronger than bitcoin in 2021. The internal inflation of ETH is many times less than that of BTC. This attracts institutional investors who see the coin as a risk hedge against rising inflation of fiat currencies. The support of the DeFi and NFT industries and the reduction in issuance increase the main altcoin’s position as an alternative store of value.

Media coverage also plays a big role in stimulating demand for Efirium. In 2021, the second most capitalized cryptocurrency is in the spotlight. The gradual transition to Protocol 2.0, the development of the decentralized finance market, and the success of non-interchangeable tokens are attracting investor interest.

Where is the best place to buy ETH

From January to November 2021, etherium rose in price by more than 500%. However, the cryptocurrency retains its growth potential and, according to analysts, is a promising asset for investment. You can buy Ethereum in 2024 on exchanges, in exchangers, through P2P services, payment systems and digital wallets. Trading platforms have long ceased to be the place to buy etherium for other coins and fiat. In 2021, exchanges offer a large number of tools to manage the asset and generate passive income.

Currency is a platform with support for tokenized assets. The service complies with global AML and KYC standards and is the first regulated bridge between cryptocurrencies and financial markets.

CEX.IO – an international platform represented in the UK, US, Canada and other jurisdictions. The exchange has licenses in all regions of presence and PCI DSS Level 2 certification, which allows it to work directly with banks and accept credit card payments.

Binance is one of the largest cryptocurrency services with trading turnover of more than $2.6 billion per day. Users have access to: spot, margin, futures trading, mining, staking, digital coin lending and other tools.

Uniswap is a decentralized exchange built on the Efirium blockchain. The platform facilitates exchanges between ETH and ERC-20 tokens.

Sushiswap is another popular DEX on the Etherium blockchain. The service offers cryptocurrency trading, lending, and passive income tools.

Memo to the novice investor

The cryptocurrency market seems complicated and risky. But it is not, if you follow simple rules of working with digital coins:

• Determine a strategy. This determines where the investor will store his assets. If buying ETH for a long term, it is more reliable to place them in a cold wallet (Ledger). For active management and trading of coins, exchanges (Currency, Uniswap) are better suited.
• Create a wallet or register an account on the trading platform. You can download an application for storing etherium on a computer, smartphone (Ethereum Wallet) or open an account in an online service (MetaMask).
• Buy cryptocurrency. Many exchanges offer to replenish the balance from a bank card or through a payment system (Binance). For this, operators charge a commission of 3-5%. Buying ETH is also available in exchangers (Bestchange), on P2P sites (Local Ethereum), through payment systems (Payeer).

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