Ethereum: The Best Cryptocurrency for Your TFSA?

If you’re looking to buy the best cryptocurrency for your TFSA, here’s why Ethereum offers investors so much long-term growth potential.

You Should Know This

Image source: Getty Images

The cryptocurrency industry has gone through a massive boom recently, and many investors are now interested. Several cryptos have significantly outperformed even the best growth stocks over the last year. But after a massive rally the last 16 months, which is the best to buy for your Tax-Free Savings Account (TFSA); Bitcoin, Ethereum or something else?

For years the industry has been controversial, but it looks like many governments, companies and investors are starting to accept cryptocurrencies as legitimate assets and investments.

One of the problems with crypto and why it’s been so controversial is because there is such little regulation in the space.

This makes it a lot riskier because there is the potential for fraud. It’s also a difficult industry because it can be hard to understand the technology behind each coin.

For many investors, though, the big gains from Bitcoin, and now more recently, Dogecoin, are enticing, and investors understandably want to get involved. Like with stocks, though, it’s important to research it and make sure it has value if you’re making an investment.

There have been plenty of examples of bubbles in the past, and there will be plenty in the future. So those cryptocurrencies that have rallied exceptionally but have little value to back those gains likely won’t pan out in the long run.

Should you buy Bitcoin?

Bitcoin is an asset with potential that could be worth a long-term investment in your TFSA. The coin will always have value because it’s the revolutionary technology that spurred innovation in the industry.

It also has a natural advantage because it was the first coin—one of those being the fact that it’s the main trading pair for thousands of coins in existence.

The problem is that there are many shortcomings of Bitcoin and its technology. That’s part of why so many new coins have been created over the years, with the aim of improving the issues in the cryptocurrency industry.

So Bitcoin will always have value because it’s so well-known and the first comer in the industry. However, the best investments today will be those cryptocurrencies that offer the most technological potential.

That’s why last month, I recommended investors focus their long-term investment in the crypto space on Ethereum.

Here’s why Ethereum is the best cryptocurrency for your TFSA

In my view, Ethereum offers investors the best potential long-term. That’s why I think one of the best stocks to buy for your TFSA today is The Ether Fund (TSX:QETH.U).

Ethereum is a decentralized, open-source blockchain. However, the main differentiator from Bitcoin, which gives it so much potential, is its smart contract functionality.

This means you can do a lot more with Ethereum’s blockchain, such as running decentralized applications. It’s a big step up in blockchain technology. And the more popular the Ethereum blockchain gets, the more the value of its native cryptocurrency, Ether, will rise.

That’s why The Ether Fund looks so promising as a long-term investment for your TFSA. Investors can gain exposure directly to Ether, which overtime should continue to grow in value.

More companies are quickly adapting to this technology too. Visa, for example, is an example of a major company that has announced its intention to use the Ethereum blockchain.

The potential of Ethereum and, consequently, Ether haven’t gone unnoticed, though. Investors have been quietly buying up Ethereum lately, even as Bitcoin has been rangebound.

Since I recommended Ethereum to investors just one month ago, it has already gained a whopping 67%. So although Bitcoin may not be in the news lately, and speculative cryptocurrencies like Dogecoin continue to make headlines, Ethereum quietly continues to rally, which is only making it more expensive to buy for the long-term.

So if you’re looking to make an investment in the cryptocurrency industry, I’d consider Ethereum, and I’d consider it soon.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Tech Stocks

A worker uses a double monitor computer screen in an office.
Tech Stocks

Forget TD Stock: 2 Tech Stocks to Buy Instead

As bank stocks continue disappointing investors in 2024, you can consider adding these two top Canadian tech stocks to your…

Read more »

financial freedom sign
Tech Stocks

1 TSX Tech Stock That Has Created Millionaires and Will Continue to Make More

Constellation Software is a TSX stock tech that has delivered game-changing returns to shareholders since its IPO in 2006.

Read more »

Money growing in soil , Business success concept.
Tech Stocks

Payfare Can Potentially Provide Explosive Growth

Payfare is a global financial technology company that powers digital banking, instant payment, and loyalty reward solutions for the gig…

Read more »

online shopping
Tech Stocks

1 Hidden Catalyst That Could Ignite Shopify Stock

Here's why Shopify (TSX:SHOP) ought to remain a top growth stock investors continue to focus on for the long haul.

Read more »

Man considering whether to sell or buy
Tech Stocks

WELL Stock: Buy, Sell, or Hold?

WELL stock has a lot of upside as the company is likely to continue to grow, posting positive earnings in…

Read more »

Double exposure of a businessman and stairs - Business Success Concept
Tech Stocks

Finally Going Private: What Should Nuvei Investors Do Now?

Understanding the reasons and factors behind a public company going private can help investors make an educated decision.

Read more »

woman data analyze
Tech Stocks

1 Stock I’d Drop From the “Magnificent 7” and 1 I’d Add

Tesla (NASDAQ:TSLA) stock is part of the Magnificent Seven, but Shopify (TSX:SHOP) is growing faster.

Read more »

close-up photo of investor Warren Buffett
Tech Stocks

3 Stocks Warren Buffett Owns That Should Be on Your List, Too

Investing in quality Warren Buffett stocks such as Mastercard can help you generate outsized gains in the upcoming decade.

Read more »