For nearly three months now, the entire cryptocurrency industry has faced several headwinds and lost tonnes of value. Even high-quality cryptocurrencies like Ethereum (CRYPTO:ETH) haven’t been immune, with the price of the coin currently down over 50% from its all-time high, trading around the US$2,400 range.
As of this morning, the entire market cap of the cryptocurrency industry stands at roughly US$1.5 trillion. That’s also down nearly 50%, or almost US$1.5 trillion in value from where it was in November 2021. To see even the major cryptocurrencies like Bitcoin (CRYPTO:BTC) and Ethereum losing value means that this sell-off is creating an incredible opportunity.
Ethereum is one of the highest potential cryptocurrencies you can buy. However, it does have its issues that need to be solved in order for the blockchain network to be able to scale up long term.
So with the price of Ethereum down quite significantly and showing no signs of recovering yet, does that make it an excellent buy today, or is it a sign of more pain to come?
Can Ethereum’s price recover from this sell-off?
Before you invest in any cryptocurrency today, there are a few things to know. Right now, due to the industry being highly volatile, cryptocurrencies are out of favour among investors, especially as volatility heats up.
Cryptocurrencies were already being impacted as monetary policy is set to be tightened in North America. However, now with the ongoing situation in Ukraine, and even more uncertainty in the markets, highly risky assets, such as cryptocurrencies, are naturally some of the biggest losers.
So for the short term, there is certainly a strong possibility that these cryptocurrencies such as Ethereum don’t recover in price. And although it could still fall in value, the cryptocurrency is already so cheap it looks as though there is much less value for it to lose now.
So for investors who are bullish on cryptocurrencies and willing to hold long term, buying Ethereum today at a 50% discount is a significant opportunity. But if you buy today, when can you expect Ethereum to begin to recover?
When can Ethereum begin to recover?
There is no telling when exactly Ethereum and the rest of the cryptocurrency industry can recover in price, especially with the heightened uncertainty in markets at the moment.
However, because the industry is currently out of favour, a few major catalysts could be what the entire industry needs to see its popularity start to grow again. And right now, with major upgrades to Ethereum’s network in the works, those catalysts could be only a short time away.
These upgrades, aimed at allowing the network to scale up considerably, are what investors and blockchain users have been awaiting for years. Already some upgrades were introduced last year, such as the burning of Ether after every transaction. However, the most significant upgrades will come later this year, which is why now, when Ethereum’s price is so low, could be one of the best opportunities to buy.
Bottom line
Ethereum is one of the highest potential cryptocurrencies you can own. Plus, with its incredible ecosystem and other blockchains that are compatible with it, even while users have moved away from its main network, they continue to remain in Ethereum’s ecosystem.
Therefore, when these upgrades are finally introduced, we could see the popularity of Ethereum’s network skyrocket again. So while the price of Ethereum is cheap, I’d certainly be looking to add it to my portfolio.
