The long crypto winter throughout 2022 was challenging for many investors, to put it mildly. But those who stuck it out have been rewarded with substantial gains so far this year.
Ethereum (ETH -1.25%) is currently up by around 52% so far this year, and Bitcoin (BTC -2.52%) has soared by roughly 74% in that timeframe. Some smaller cryptocurrencies have seen even larger gains, with Solana (SOL -5.97%) surging by a whopping 141% this year.
It's still critical to choose the right investments, however. Despite this upswing in prices, there will likely be more volatility on the horizon, and buying the wrong crypto now could come back to bite you later.
While crypto is still speculative and there's no one-size-fits-all buying option, there's one investment I'm loading up on in August: Ethereum.
Ethereum continues to be a juggernaut
Ethereum has long been a leader in the industry, and it continues to dominate. It's the second-largest crypto behind Bitcoin by market cap, making up just under 20% of the entire crypto sector.
Ethereum's smart contract platform provides a wide range of uses, as it can host everything from non-fungible token (NFT) marketplaces to decentralized finance (DeFi) applications to metaverse projects and more.
That alone gives it more utility than its largest competitor Bitcoin, which is used primarily as a payment coin or hedge against inflation. Ethereum's sheer size also gives it an advantage over smaller, similar networks (such as Solana or Cardano), as it dominates the smart contract space.
Late last year, Ethereum developers also successfully finalized The Merge. This landmark upgrade transformed the network into a proof-of-stake blockchain, reducing its energy output by roughly 99%. Meanwhile, Bitcoin still uses the incredibly energy-intensive proof-of-work system, which could make it harder for the crypto to keep up with demand over time.
More upgrades could further strengthen Ethereum
The Merge was the biggest update to Ethereum so far, but it's far from the last. In fact, Ethereum founder Vitalike Buterin said at the Ethereum Community Conference last year that the network is only around 40% complete -- and it should get stronger with each update.
Buterin has created a roadmap of Ethereum's future updates, and the next one -- called The Surge -- is expected to improve the blockchain's speed and reduce transaction fees.
This has long been a sore spot for Ethereum, and its sluggish transaction times and high fees have caused many users to flock to faster and cheaper networks like Solana. If The Surge is able to squash these problems, it could be monumental for Ethereum's long-term potential.
Beyond The Surge, there are several other updates on the roadmap -- including The Scourge, The Verge, The Purge, and The Splurge. The later updates likely won't take place until several years from now, but the roadmap has been designed to tackle problems in order of most to least pressing for users.
Is Ethereum a good investment right now?
Ethereum is already a strong investment, and it should only get stronger with each new upgrade. But there are risks to consider, too.
For one, the crypto industry moves at break-neck speed, and developers are creating new blockchains by the day. While Ethereum's size and popularity give it a major leg up over smaller competitors, that doesn't mean a new network can't swoop in and steal market share -- especially if Ethereum fumbles any of its future upgrades.
Also, cryptocurrency in general is still a risky investment. Despite all of its potential uses, Ethereum's utility is largely based on speculation. In other words, if NFTs, DeFi, the metaverse, or other decentralized applications gain widespread acceptance, Ethereum will benefit from it. If they don't, Ethereum could suffer.
When you invest in any cryptocurrency, there's always a risk it may not pan out. But if you're willing to take that risk, Ethereum could be a strong investment with loads of long-term potential.
