After a nearly three-month slump, the leading cryptocurrency has started to recover. Bitcoin has grown about 21% in three weeks and is fluctuating above the US$40,000 line. It’s too early to tell if it’s just a fluke or the start of an actual recovery-fuelled bull run, but it’s the largest hike since the November 2021 peak. If the lead crypto is recovering, the rest of the tokens might soon follow.
This rise and fall are common for most cryptocurrencies, and a long-term holding of Bitcoin is likely to yield profit, even if you bought it at the peak, though the profit size will be significantly smaller. And there is one other crypto that can withstand these fluctuations or even crashes in the crypto market and may prove even more resilient than Bitcoin in the long run.
Ethereum for the win
Even though it wasn’t the second crypto to come online, Ethereum (CRYPTO:ETH) quickly gained second place in popularity among cryptocurrencies in the world. It’s the second-largest crypto by market cap as well. And though it has a lot in common with Bitcoin, the differences are many and more pronounced. They are the reason this token might withstand whatever the crypto market goes through.
Ethereum has an infinite supply, it’s easier to mine, and the token issuance and confirmations are about 10 times quicker. However, it’s the versatility of the Ethereum blockchain and its use in smart contracts that gives it its edge. An example would be a derivative market: NFTs. Even after a massive drop, Ethereum still dominates about 80% of the NFT market. It’s also used for decentralized financial applications.
Ethereum’s performance and scope
Ether, the native crypto token of the Ethereum blockchain (though the two names are often used interchangeably), has been closely following the growth pattern of Bitcoin. This coin has already grown about 28% from its lowest valuation, but it’s still about 35% down from its peak. So, if you buy now and Ether just goes as high as its last peak, you may still make a decent profit in a shorter span than stock, or ETF might allow you to earn the same profit.
However, it will become even more attractive if it falls again and further this time. The chances of this crypto falling down enough to reach a three-digit price tag are pretty low. But even if it falls below US$2,000, it can easily double your capital by reaching or near its last peak valuation.
Foolish takeaway
The current fluctuations of cryptocurrencies like Ethereum are quite similar to that of certain growth stocks, albeit with more volatility. The days of 10 times or 20 times growth might be over, especially if you stick to the top dogs. The volatility, however, allows for much more rapid growth than most steady growth stocks offer, so you can take advantage of the time factor and enjoy short-term growth.
