Ethereum has ripened into an established blockchain with an even more sophisticated native coin. It’s often used for smart contracts, which are accessible and transparent, and is a popular blockchain for decentralized applications, as it reduces programming time and helps launch projects right away. The native cryptocurrency of the Ethereum network has two primary functions: payment for the transactions made via Ethereum (gas costs) and collateral “stake” for the security of the blockchain. Investing in Ethereum represents a way to earn high returns while supporting the future of technology.
If you’re wondering how to buy Ethereum, you must connect your bank account or debit/credit card to fund your account on the crypto exchange. Of course, there’s more to it than that. The Ethereum price is up today (+0.81%), with a circulating supply of 120.27 million, but it’s making forceful efforts to break the $1,900 resistance. Even if conditions aren’t ideal for traders, it’s still possible to profit from price movements in anticipation of market appreciation or depreciation.
Ethereum seems to be underperforming, leading to some concerns, which makes it an intriguing investment. It’s still the second-biggest digital asset worldwide, and its price could move upward in the following year. According to ChatGPT, Ethereum could trade between $3,000 and $10,000, which is attributable to the volatile crypto market.
Altcoins Offer Higher Potential Returns But At a Higher Risk
Altcoins have interesting developments lined up in November, which could impact their price. For example, Ripple’s Swell event will be held on November 8-9 in Dubai, and expectations are bigger this time. The private event for Ripple customers, prospects, and partners is aimed at showing the company’s new technology and promoting its cryptocurrency XRP. It’s rumored that Ripple will announce an Initial Public Offering (IPO) or an app for a Virtual Asset Regulatory Authority (VARA) license in the Emirates. The conference held by the distributed ledger startup could have a positive impact on the price of its cryptocurrency.
So, is it better to invest in Ethereum or altcoins? Altcoins can be considered variations of Ethereum, having been created to improve functionality or add features not present in Ethereum. According to Cointelegraph, altcoins like Solana, Ripple, and Cardano have performed better than Ethereum, with returns of 35%, 37%, and even 75.5% in the last month. Indeed, altcoins have a better chance of surviving, but they carry significant risks. More exactly, their value can fluctuate greatly within a short time period, leading to considerable gains or losses. Additionally, the altcoin market is characterized by fewer investors and less activity, which produces lower liquidity.
What’s Holding Back Ethereum? Is Holding Ethereum a Good Idea?
Ethereum’s performance lags behind that of altcoins, although it’s nowhere near the lowest price recorded. Price development is difficult, if not impossible, to predict and can’t be appreciated without the world of DeFi. Ethereum isn’t a cryptocurrency but an open-source software platform for blockchain applications, early movers in the technology, financial, gaming, and collectibles categories. Therefore, if DeFi does well, so will Ethereum. The current disparity between Ethereum and altcoins can be explained by several factors, namely high gas fees, the total number of deposits on the network, and the activity of decentralized apps.
Gas is what you pay to have transactions processed or be able to deploy smart contracts on the Ethereum network; it measures network traffic and the level of computational power required to execute certain transactions on the blockchain. Gas fees are calculated by multiplying the gas limit by the gas price, after which the result is converted to Ethereum. Needless to say, more complex transactions, such as executing a smart contract, incur higher gas fees than something more elementary, such as sending Ethereum from one wallet to another. Gas fees are astronomically high, and this negatively impacts the use of decentralized apps.
Vitalik Buterin moved a significant number of tokens to Coinbase, one of the most important crypto exchanges in the United States. It’s not the first time Ethereum’s co-founder sold crypto holdings, having sent Ethereum not only to Coinbase but also to Bitstamp. The overall deposits on Ethereum have reached the lowest level since August 2020, with traders making a move towards HODLing and staking. HODLing can generate profits via the re-evaluation of the digital asset, offering a solution to the volatility of the cryptocurrency market. On the other hand, staking isn’t just for passive income; it’s for actively contributing to the security and operations of the proof-of-stake network.
Last but not least, Ethereum-based decentralized apps had a total locked value of 12.7 million at the beginning of November, which represents a 4% decrease from two months earlier. The total value locked is an indicator of the adoption scale of a DeFi project. On-chain data suggests reduced activity on the Ethereum network, so Ethereum has become inflationary, with the value of each individual coin decreasing. The average number of active addresses on the Ethereum blockchain decreased by 3%, as reported by the Cointelegraph, so there are fewer outgoing transactions at present. This is indeed surprising, given that Ethereum is one of the most popular blockchain networks.
Concluding Thoughts
Ethereum’s underperformance against altcoins is plainly visible. Altcoins improve efficiency, transaction speed, and functionality or provide other advantages to the Ethereum network, but venturing outside the relative safety of Ethereum can be perilous. Indeed, altcoins outperform Ethereum and generate considerable returns for investors, but they’re highly risky and speculative, so think carefully before taking the plunge. Ethereum is struggling, as it has done throughout much of the year, but it’s a more stable investment and might even perform better than altcoins in the future.
Ethereum is expected to cross the $2000 level by the end of the year, so investors and holders must be patient to capitalize on this engagement and make a strong market entrance. ChatGPT believes that Ethereum will undergo a series of transformative price behaviors, which will turn out to be crucial in terms of support and resistance. According to the AI system, Ethereum is a volatile asset, meaning that its price is controlled by market sentiment, adoption, network activity, and regulatory developments, to mention a few. We might be surprised by the price.
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