A lot of investors have warmed up to cryptocurrencies this year, and Ethereum (ETH -0.51%) has been a popular choice. It pioneered smart contracts, and its evolving blockchain tech is just getting started.
Are you new to Ethereum and see it as a way to diversify your stock-heavy portfolio? Are you a seasoned vet of the crypto market, battle tested by the volatility, who accepts the ups and downs in the pursuit of market-thumping returns?
No matter where you're coming from, let's go over some of the figures that make Ethereum so promising.
Ethereum is up 560% over the past year as of Tuesday morning. Past performance is naturally no indication of how the future will play out, but I may as well start with the jaw-dropping return that Ethereum has delivered to its longtime investors over the last 12 months.
The price swings have been substantial along the way, so investors and traders need to know that this isn't a straight line moving higher. It's still a glitzy number to get your attention. Let's dig deeper.
Ethereum commands a market cap of $476 billion as of Tuesday morning. It's the second-most-valuable cryptocurrency, and there's a lot of elbow room for the silver medalist among digital currencies.
The top dog is at $924 billion, so Ethereum would have to nearly double from here to get there. Far away in the rearview mirror, the next most valuable token is at $56 billion.
One thing that sets Ethereum apart from other crypto denominations is that it's the most popular platform used by developers creating decentralized apps (dApps). More than 3,000 apps have been put out that are fueled by Ethereum's blockchain. The 2,979 figure is the number of Ethereum-powered apps listed by apps tracker DappRadar.com.
We're talking about exchanges, marketplaces, games, collectibles, and other decentralized finance applications. These aren't all obscure fringe apps. In fact, each of the top five apps have served more than 100,000 users over the past month.
The top dog is Uniswap (UNI -0.46%), a decentralized finance app that lets users trade their crypto without an intermediary. It had more than 346,000 users over the past 30 days with total balances of nearly $10.9 billion.
This has been a good year for Ethereum despite its recent weakness. Next year should be even better. Ethereum is ready to migrate to a proof of stake model that will shift production from miners to validators. The Ethereum 2.0 makeover will make it faster and cheaper to use.
The migration could happen as early as the first quarter of next year. The blockchain leader is about to put the pedal to the metal, and we're now just 11 days away from the first quarter of 2022.
Ethereum can currently process dozens of transactions per second. There are plenty of cryptocurrencies that can go through thousands -- if not tens of thousands -- of transactions per second. Ethereum should take the lead when its migration is complete, promising the ability to go through as many as 100,000 transactions per second at a much lower cost to end users than they have to pay now.