Trading at just over €1,000 at the start of 2021, it tripled in value in one year, touching €3,000. These 2 numbers alone are enough to describe what a year Ethereum has had, leading investors to triple their capital in one year. If 2021 was a year of great growth for cryptocurrencies, Ethereum was certainly among the most popular digital currencies that reported the best performance. Such success makes many ask the inevitable question: will buying Ethereum in 2022 be as successful?
It is useful to list some key elements of this cryptocurrency, which represents 346.98 billion in market capitalization and 15% of total market cap of cryptocurrencies. Furthermore, Ethereum is the second most popular cryptocurrency after Bitcoin and there are 119 million of these tokens in circulation at the moment. Ethereum’s all-time high value was €4285.2.
Running these numbers is not a trivial exercise, because they give the exact measure of the importance and strength Ethereum has achieved in the cryptocurrency world.
Why has Ethereum been so successful?
The project behind Ethereum was born in 2013 although the coin and its blockchain were launched in 2015 by Buterin and Joe Lubin, founder of blockchain software company ConsenSys.
Ethereum, like other cryptocurrencies, uses blockchain technology. Imagine a very long chain of interconnected blocks, with all the information about each block known to every member of the blockchain network. With each member of the network having the same knowledge of the blockchain, which functions as an electronic ledger, it is possible to create and maintain a distributed consensus on the state of the blockchain.
The Ethereum platform can support many more applications compared to other cryptocurrencies. Network users can create, publish, monetize and use a wide range of applications on the Ethereum platform and can use ETH or another cryptocurrency as payment.
It is therefore in this versatility, and the fact that it is used not only for its proprietary currency, but also for many other cryptocurrencies and applications, that is one of the keys to Ethereum’s success, and why it is solidly in second place behind the king Bitcoin and has a bright future ahead of it.
Ethereum could repeat the success of 2021
What will happen in 2022?
The performance in 2021 showed how Ethereum is not simply dependent on Bitcoin’s performance, but possesses a momentum of its own. This is why Ethereum could repeat the previous year’s success in 2022, and potentially even do better. Of course, the history of crypto teaches us that proper caution is always needed when investing. But also that cryptocurrencies, and Ethereum in particular, are capable of powerful upward rides after periods of stagnation or decline.
Cryptocurrencies are also gaining credibility among many investors as both an anti-inflationary currency and a safe haven asset. And in a very particular moment like the one linked both to a pandemic crisis still not concluded, and to other crucial economic conjunctures such as the strong increases in energy prices, many could turn to them. Ethereum, for its solidity, diffusion, and projection towards the future, is one of the best candidates for this type of investor.
Ethereum has been a major player in 2021, tripling its value from around €1000 to €3000. It not only benefited from the generally good performance of cryptocurrencies, but was also one of the best performing cryptocurrencies ever. Ethereum owes its success to the great versatility of its platform and blockchain, which is not only used for its proprietary token but also by many other cryptocurrencies and applications. While prudence and risk management are important in any investment, Ethereum has the potential to perform well in 2022. The outcome will only be known at a later date, but the history of cryptocurrencies shows that they have always reacted to setbacks to restart, recover and increase their value.
*This article has been paid for. cryptodailynews24.com did not write the article or test the platform.
The post Ethereum had an incredible year: will it continue to grow in 2022? appeared first on cryptodailynews24.com.