Since the dawn of Bitcoin, every investor has been looking to lockdown on the newest cryptocurrency. And Ethereum may be the newest cryptocurrency that has everyone’s attention.
Since you’re probably here for the coupons, you may not know what cryptocurrencies are. So here’s the standard definition:
Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
Basically, it’s digital money. And if you’ve been up to date on any investing news in the past 2 or 3 years, then you may have heard of a popular little digital currency called Bitcoin. Bitcoin was one of the first digital currencies to really gain popularity. And if you had the fore site to buy 1 Bitcoin back in 2013 for $20, that $20 investment would be worth about $940 4 years later (as of March 24th, 2017):
Over the span of 4 years, a Bitcoin holder would have accrued a 4600% return on his/her investment. Wow.
This is simply remarkable. Even savvy investors can’t get that earnings from stocks or bonds or options. And when you have this much of a return, it’s easy to understand how Bitcoin is so popular in the news.
But now there’s a new cryptocurrency on everyone’s mind: Ethereum
So now that the concept has been proven: cryptocurrencies are a high-yield investment vehicle. But no one wants to buy Bitcoin now, due to how fast it gained value. So everyone’s looking for a new cryptocurrency to gain the same momentum. And that new cryptocurrency is Ethereum.
Admittedly, I don’t know much about what ethereum actually is. It has something to do with blockchains that decentralizes transactions, contracts, and other legally binding documents. The theory is that with ethereum, you would no longer need a CEO, banker, attorney, or anyone else to mitigate a business or financial transaction. I’ve been studying it for a while now, and although it might sound like I have an understanding, there’s so much more to it. But Mashable wrote a nice little summary on what Ethereum is.
When I first heard of ethereum, it piqued my interest, and I checked out it’s chart.
Holy Jabroni! In August 2015, it was trading for $1.25. And now, in March 2017, it’s trading at about $50 for 1 Ethereum. So in the span of 20 months, Ethereum has gained a 3900% increase in value. So at this point, I just think it’s a pump and dump type of investment. But I’m still intrigued, so I do a little more research.
And my research dismissed any pump-and-dump theory. Microsoft, JP Morgan, Intel, and over 20 other large corporations are working with ethereum, to build a decentralized, ethereum blockchain. So when I saw this, I new ethereum was being taken seriously.
And this is the point where I decided I should take a position in Ethereum. As of March 24th, 2017, I own 20 ethereums (even though I’m not really sure what that means) at an average price of $42. And I don’t like investing like this. I like to know exactly what I’m investing in, so I can make better predictions and strategies.
But with ethereum getting the attention from major companies, and getting hyped in popular media outlets, I’m hoping that I got in early enough so that the value of ethereum really pops when it gains reaches the same popularity as Bitcoin.