Ethereum (ETH +0.32%) prices have historically proven very volatile. It's not uncommon to see its value double or triple in a matter of months. In other months, however, its price has been cut in half or worse.
But what about the long term? If you had invested $300 into Ethereum five years ago, and held on, you'd likely be very pleased with the outcome.
CRYPTO: ETH
Key Data Points
How profitable has Ethereum been over the last five years?
If you had put $300 into Ethereum five years ago, you'd have roughly $5,600 today. That's a 1,770% return, even higher than Bitcoin's 1,000% performance over the same period. The S&P 500, for comparison, increased in value by just 87%.
But before you jump in and buy Ethereum, there are a few important caveats to note.
First, Ethereum was still a young, relatively unknown technology five years ago. The crypto industry has come a long way since then, with far greater utility, adoption, and recognition. It's possible that Ethereum's biggest days of growth are behind it.
Second, these eye-popping returns were only accrued by investors with so-called diamond hands -- that's crypto terminology for holding tight through extreme ups and downs. If you purchased Ethereum five years ago only to sell it at the start of 2023, for example, you'd only be sitting on a 640% gain. That's still impressive, but far less than what patient investors have earned. Conversely, if you purchased Ethereum at the start of 2022 only to sell one year later, you would have lost two-thirds of your original investment!
Ethereum has proven a terrific long term investment, but its short term movements are difficult to predict.
