DeFi
The Ultimate Cryptocurrency to Buy Today
Strong fundamentals and promising prospects make it the top pick.
There are many cryptocurrencies worth considering in the current landscape, but if I had to choose the one with the greatest upside potential, Ethereum (ETH 0.91%) takes the crown.
While Bitcoin (CRYPTO:BTC) generally holds the title of ultimate cryptocurrency regardless of market conditions, Ethereum demands recognition and could be an ideal opportunity for investors.
The essential
On several fundamental metrics, Ethereum is strong, with robust decentralization and security features second only to Bitcoin. Its extensive feature history further solidifies its status as a top competitor.
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, presenting an opportunity to capitalize on a 40% upside if it returns to its former glory.
Being below its all-time high does not automatically make it a profitable investment, but the substantial deviation from its peak value is particularly attractive due to promising future events. One of them is the potential approval of an Ethereum ETF by the Security and Exchange Commission.
The next crypto ETF?
Following the approval of spot Bitcoin ETFs, Ethereum ETFs appear to be the next logical step in the convergence of traditional finance and crypto. With its own ETF, Ethereum would be open to a broader investor base in the stock market, injecting new capital and potentially driving up its price.
There are some concerns about when approval will occur, as government agencies struggle to categorize Ethereum as a security or commodity, like Bitcoin. If it’s a title, the chances of approval seem unlikely.
But given the Commodity Futures Trading Commission chairman’s comments that Ethereum is a commodity, as well as the growing appetite of investors seeking exposure to it, approval is likely to happen one day. And if so, it could create new demand as Wall Street looks to get its hands on the world’s second most valuable cryptocurrency.
The future of finance
Another factor in Ethereum’s appeal is its central role in the future of tokenization, which involves the digitization of real-world assets such as real estate, stocks, bonds and other financial instruments and their representation in the form of digital tokens on a blockchain.
Analysts expect the tokenization market to be worth $10 trillion by 2030. Thanks to its sophisticated smart contract capabilities (the foundation of tokenization assets), as well as its security and decentralization proven, Ethereum is able to become the preferred blockchain for tokenization projects. .
This move towards tokenization could revolutionize traditional financial markets, providing 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 Fink’s mouth is, 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 major sectors in crypto: decentralized finance (DeFi). Brimming with potential, the DeFi economy is made up of non-fungible tokens, stablecoins and more. Although Ethereum is not the only blockchain to offer DeFi functionality, it is clearly the leader.
Today, approximately 60% of the value of the DeFi economy resides in Ethereum, making it an ideal indicator for investors wanting full exposure to the sector’s burgeoning potential. The DeFi landscape is often described as highly competitive, but the reality is that crypto remains the undisputed champion. With its clear plan to introduce upgrades and increase its capabilities, Ethereum will likely widen the gap between it and its competitors in the years to come.
Ethereum is one of the leading cryptocurrencies on the market. With several catalysts on the horizon, it has near-term appeal as well as serious long-term potential, making it the ultimate cryptocurrency to invest in today.
RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool posts and recommends Bitcoin and Ethereum. The Mad Motley has a disclosure policy.