Is Ether the Biggest No-Brainer Investment of This Generation?

With Ether’s consistent rally the last two years as users have flocked to the Ethereum network, is it the best investment of this decade?

| More on:
Question marks in a pile

Image source: Getty Images

When Bitcoin was created back in 2009, little did we know what a massive revolution it would create. Soon, the power of blockchain technology started to become apparent, and six years later, Ethereum and its native currency, Ether, were launched.

For a long time now, Ether has been the second-most-valuable cryptocurrency, and for good reason. The blockchain network has opened up a tonne of possibilities that only 10 years ago would have been unimaginable.

And while there are competitors launching that do have some advantages over Ether, it has upgraded its network to improve its usability, which has made it even more attractive lately.

Many analysts now think Ether could skyrocket. I’ve even seen an ambitious price target of US$50,000 per Ether by 2030.

So, with all the optimism and potential of Ethereum, is it one of the biggest no-brainer investments of this generation?

Why is Ether a no-brainer buy?

When Bitcoin was launched, what followed was a debate on the power and potential of blockchain technology. Bitcoin was certainly revolutionary, but you can only use the blockchain to send the cryptocurrency.

With Ethereum, thanks to the power of smart contracts, there is a tonne of possibilities, which is why many think blockchain technology is the future.

It has spurred a tonne of creativity and innovation in the sector. And the more use cases for the Ethereum network as well as the more apps running on the network, the more Ether will be demanded, which is why so many investors and analysts are so bullish.

NFTs are just one creation as a result of Ethereum’s blockchain, and there are many more. We are starting to see a lot more play-to-earn video games as well, and it looks like they could be the future.

And, of course, the rise of decentralized finance (DeFi) has also played a significant role in Ether’s performance.

Right now, there is almost US$200billion of total value locked in smart contract platforms, of which almost US$120 billion is locked in DeFi projects on the Ethereum network.

So, while this can be an excellent way to help your investment in Ether grow even faster, it also shows the long-term commitment from many in the market as well as the consistent increase in popularity the industry continues to see.

A top stock to buy for exposure to Ethereum

If you want to gain exposure to the massive long-term potential of Ethereum, buying Ether is the best way to go. However, for many investors, I think the best option would be a stock that gives you exposure to Ether, such as the CI Galaxy Ethereum ETF (TSX:ETHX.B).

Buying the actual Ether is a possibility too. However, in my opinion, it only makes sense to buy the actual Ether if you plan to use it. If you just want exposure to the cryptocurrency because you believe it has a tonne of long-term potential as I do, the ETF will be the better choice for several reasons.

Firstly, you can buy it in a TFSA, which could be a massive advantage if Ether skyrockets like many expect it to, and you don’t have to pay any tax on your gains.

Furthermore, it’s a lot easier, faster, and more cost efficient to buy the ETF. Not only would you have to create a wallet and get cash into the cryptocurrency universe, but buying the Ether would be quite costly in addition to sending it back to your wallet. Furthermore, these steps, while not super complicated, aren’t straightforward either.

This is why I’d recommend the ETF to most investors, especially considering it charges a management fee of just 0.4%.

Although Ethereum launched over six years ago, the true potential of the blockchain network is just beginning to show. Less than two years ago, there was only US$10 billion of total value locked on its network. So, in just two short years, that number has grown 10-fold.

And with all the innovation that is consistently going on, I wouldn’t be surprised if that number actually started to grow even faster.

So, if you’re looking for a high-potential investment in the cryptocurrency industry, the more you learn about Ethereum, the more it seems like a no-brainer investment.

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.

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Stocks for Beginners