Understanding the Pros & Cons of Investing in Ethereum

Understanding the Pros & Cons of Investing in Ethereum


Ethereum is an open-source blockchain platform and has cutting edge apps on it, like decentralized apps, smart contracts, decentralized financial services, tokenized assets etc.  It is a high reward and high risk investment; when the Ethereum value falls, users might lose a  portion of the invested money just like any other cryptocurrencies.  Ethereum is known for its outstanding performance which has attracted both institutional and traditional investors. There are few pros and cons while investing in ethereum. 

What Is Ethereum?

Ethereum is an open-source blockchain platform that is highly innovative and supports financial transactions carried out in smart contracts, tokenized assets, DeFi, and financial services. Ethereum’s native currency is ether, the sole competitor of Bitcoin and the second-largest Crypto by market cap. It supports a wide range of tokens like ERC20 tokens. Investing in ethereum has potential, and it is considered one of the most popular financial ventures in the short and long term.

Historical Data of Ethereum Coin

There are around 118 million of ethereum as market supply as of 2021 October. Even though ethereum allows new coins to be mined but the annual supply is limited. This is in contrast with Bitcoin’s 21 million coins that can be mined and issued, and the process becomes harder. Ethereum can be mined using the computers on its network; the users should perform complex mathematical calculations to unlock the coins or a part of it.

Working of Ethereum

Ethereum is one of the most popular cryptocurrencies that operates on the decentralized ledger, known as the blockchain, that manages and tracks the operation. The transaction takes place on the recorded blockchain, and the computers verify the transactions. Further, using this technology, investors can exchange or trade cryptos without any Central authority or intermediaries like banks and complete anonymity. Ethereum allows its users to execute transactions anonymously even though they are available publicly on the blockchain.

Is It a Good Investment? And Is It Profitable?

Investing in cryptocurrencies comes with a risk and reward factor. In simple words investing in ethereum provides more potential rewards than its risk or consequences. ETH has a huge market cap, which attracts big businesses to use their blockchain. Moreover, ethereum is more affordable when compared to Bitcoin; investing in cryptocurrency is highly risky; ethereum has revolutionized the digital currency market, and it has diversified the user’s portfolio. The user should decide based on the research whether they should invest in ethereum or not. You can also check expert opinions about the Ethereum forecast for next 5 years.

Pros and Cons of Ethereum Coin


Easy transactions

Ethereum helps the users carry out global transactions without banks or intermediaries; this implies that it offers a low-cost and easy way to execute transactions around the world. It is capable of executing secure and quick transactions for its users, and it also helps create a decentralized financial infrastructure globally for handling all kinds of exchanges.

Easy to Mine

Ethereum has the most number of miners compared to Bitcoin mines because there are more people involved in it. This implies that the chance of reward is higher when they proceed with the mining process. More the number of miners, the value becomes higher, increasing the price and demand.

Ethereum has huge support 

Recently, JP Morgan and Microsoft have started supporting ethereum and its products. This means they can use ETH blockchain for developing blockchain apps through it. This will make the demand go high for ethereum, and it might increase its value. 



The major problem is scalability when a lot of people are trying to transact at the same time; they should wait for a few hours or before the transaction gets processed. If the blockchain network is faster,  transactions are processed faster.


Currently, it is quite expensive when ethereum is used for transactions; this is because users are making use of ethereum as an investment than currency, even though other currencies like Bitcoin work the same way. The price of ethereum is not stable, and it fluctuates whenever there is volatility.

Uses of Ethereum

  • Ethereum blockchain technology is used for creating applications that go beyond just creating any cryptocurrencies. Launched in 2015, it is one of the most well-established, largest, and open-ended decentralized platforms.
  • Ethereum allows the usage of smart contracts and decentralized applications that can be developed and run without downtime, interference, or control from any third party, has its programming language and runs on its blockchain. This enables the developers to create and run distributed applications. 
  • Ethereum is used for two purposes – one is it is traded as a cryptocurrency on Crypto exchanges just like other cryptocurrencies; in addition, Ethereum is a network used to run applications.

Future of ETH Coin by Crypto Experts

In recent months the cryptocurrencies prices have gone up and down and made headlines. Ethereum had seen a few price changes in 2016 when its price was around $5 to $15; in 2018, it went to an all-time high of $1500, and by 2018 December, it went down to less than $100.


To conclude, ethereum is one of the best ways to diversify the Crypto portfolio, and adding ethereum to the portfolio can offer more benefits in the long term. When the Crypto market does not correlate with the performance of the stock markets, adding cryptocurrencies to the portfolio can benefit the user. But the user should consider the volatility of the cryptos even though they offer future advantages. 

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