Ethereum, the blockchain platform known for supporting decentralized applications (dApps) and smart contracts, has been at the center of investment debates due to its current price below $2,000, a stark contrast to its all-time high. Despite a substantial price increase of over 52,000% since its 2015 launch, Ethereum now sits 68% off its peak. This drop has sparked interest among some investors who view the current price as a buying opportunity, particularly in light of the crypto market normalization that followed the bull run of 2021 and the downturn induced by rapidly rising interest rates in 2022.
The potential growth in dApps and smart contracts has attracted believers who see numerous developing use cases for Ethereum. Despite a slowdown in decentralized finance (DeFi) protocols and non-fungible tokens (NFTs), Ethereum continues to be a leader in these areas. The demand for blockchain is expected to surge during a market rebound, promising quick profits for investors.
Ethereum's transition to a proof-of-stake consensus mechanism 13 months ago significantly reduced its energy consumption by over 99%, earning praise from climate activists and promoting a more sustainable future for the platform.
However, Ethereum's volatility and regulatory uncertainty have also raised concerns. Critics warn that investing in Ethereum could be risky for those near or in retirement. Some even question Ethereum's necessity in the existing financial landscape, suggesting it may be solving non-existent problems. The failures of major crypto firms underscore the adequacy of the current financial system for most people.
If the Securities and Exchange Commission (SEC) categorizes Ethereum as a security, it would face comprehensive reporting requirements and increased public scrutiny. Furthermore, there are lingering doubts about whether Ethereum will ever return to its all-time high due to the one-hit wonder euphoria of 2021.
Despite the potential gains, the Motley Fool Stock Advisor team suggests there are ten stocks that could be better investments than Ethereum. This advice underscores the ongoing debate about Ethereum's viability as an investment amidst a normalization of crypto markets.
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