The Government of Paraguay will strengthen the measures directed to combat the illegal cryptocurrency mining operations in the country. In a recent meeting, ANDE, the National Power Administration, the Supreme Court, and the Department of Justice, agreed to deal with these crimes swiftly given the damages they cause to the Paraguayan power grid. Paraguay Prepares […]
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Bitcoin (BTC 1.68%) has stolen the cryptocurrency spotlight. Its price has soared 125% over the past year due in large part to enthusiasm surrounding spot Bitcoin exchange-traded funds (ETFs). However, Ethereum (ETH 1.51%) returned about 80% over the same period, and at least one Wall Street analyst sees bigger gains on the horizon.
Geoff Kendrick, head of digital assets research at Standard Chartered Bank, believes smart contract technology and spot Ethereum ETFs (if approved) could send the cryptocurrency to $14,000 by 2025. That implies about 310% upside from its current price of $3,400, an enticing figure given the short timeline.
Is Ethereum worth buying?
The Ethereum blockchain is programmable, meaning that developers can build self-executing programs called smart contracts on the platform. That technology is the foundation of tokenization and other decentralized finance (DeFi) applications, and the many utilities of smart contracts could increase demand for Ethereum in the coming years.
To elaborate, tokenization is the process whereby ownership rights to digital and physical assets are represented as tokens on a blockchain, which itself serves as a digital ledger. Benefits include improved audit transparency because details are automatically and immutably recorded on the blockchain when tokens are transacted. Tokenization could also improve asset liquidity by enabling fractional ownership of assets like real estate, artwork, and other collectibles.
More broadly, DeFi platforms could expand access to financial services and reduce the underlying costs by allowing users to borrow, invest, and earn interest on money without intermediaries like banks. That would be particularly valuable in underbanked regions of the world.
Ethereum is the blockchain best positioned to benefit if and when smart contract technology sees greater adoption. I say that because users clearly have a preference for Ethereum. It accounts for 56% of the funds held in DeFi applications, meaning it holds more market share than all the other blockchains combined, according to DeFi Llama. Consequently, demand for the cryptocurrency could soar if DeFi goes mainstream, simply because users must pay transaction fees to interact with products on the blockchain.
Spot Ethereum ETFs are investment products that (if approved) would provide direct exposure to Ethereum while eliminating the hassle of cryptocurrency exchanges and blockchain wallets. Those funds would greatly reduce friction for individual and institutional investors, which could boost demand for the cryptocurrency and send its price higher.
Indeed, recently approved spot Bitcoin ETFs illustrate how much demand such investment products could unlock. Specifically, the spot Bitcoin ETFs issued by BlackRock and Fidelity saw greater cash inflows during their first month on the market than any other ETFs launched in the past 30 years, according to Bloomberg Intelligence.
With that in mind, seven issuers have submitted applications for spot Ethereum ETFs, including BlackRock and Fidelity. The Securities and Exchange Commission (SEC) must reach a decision by May 23, but investors should not take approval for granted. In fact, James Seyffart at Bloomberg expects the SEC to deny the applications this time around. His assessment is based on the fact that regulators have not engaged with potential issuers to the same degree that they did with spot Bitcoin ETF applicants before approval.
Smart contract technology is intriguing, and the potential benefits of tokenization and other DeFi use cases are undeniable. However, widespread adoption of Ethereum-based smart contracts is probably a ways off, even in the best-case scenario.
Additionally, I doubt spot Ethereum ETFs will win regulatory approval in May. Fortune recently reported that the SEC is investigating the Ethereum Foundation, which oversees the crypto, as part of its push to classify many cryptocurrencies as securities. The outcome could shake the market in unpredictable ways, and it would be unlikely that the SEC would approve spot Ethereum ETFs while the investigation is ongoing.
For those reasons, I would avoid Ethereum right now. That does not mean the cryptocurrency will lose value. In fact, Geoff Kendrick may be spot-on with his target of $14,000. However, I see more compelling investment opportunities in Bitcoin and the stock market.
Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
The National Tax Service in South Korea is preparing to launch a virtual asset tax system to help analyze the information received from cryptocurrency holders to avoid cryptocurrency tax evasion. Local sources reported that the agency had contracted the services of a third-party company to help in this task, and it is scheduled to be […]
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Ark Invest’s Cathie Wood is a big believer in Bitcoin (CRYPTO: BTC). She launched Ark’s first spot price Bitcoin exchange-traded fund (ETF) in January once regulators gave their approval.
Earlier this year, Wood raised her price target from $1 million to $1.5 million by 2027 — which would represent a whopping 2,139% jump from Bitcoin’s recent price of about $67,000. Wood expects that explosive growth to be driven by three tailwinds: the approvals of Bitcoin ETFs, institutional purchases of those ETFs, and the expected halving next month, which will cut the rewards for mining Bitcoin in half.
We should take those estimates with a grain of salt, since Wood has a habit of making wildly bullish predictions and not necessarily delivering; her flagship Ark Innovation ETF, for example, has only risen 13% over the past five years as the S&P 500 rallied 88%. That said, we should still consider whether Wood’s bullish thesis makes sense and if Bitcoin is worth buying.
The bulls believe Bitcoin will eventually join gold, silver, and other precious metals as a hedge against long-term inflation. Like the gold bugs, Bitcoin’s bulls believe that fiat currencies are destined to depreciate, and the trend will drive more governments, businesses, and investors to adopt the cryptocurrency. Up until this January, most of those people invested in Bitcoin in three ways: through direct purchases on a crypto exchange like Coinbase, through a trust like Grayscale Bitcoin Trust, and through ETFs that were pinned to Bitcoin futures.
But all three methods had drawbacks. Crypto exchanges were disconnected from the public stock exchanges, prone to sudden disruptions and outages, and frequently targeted by regulators. The collapse of FTX and the recent criminal charges against Binance also rattled investors’ confidence in stand-alone cryptocurrency exchanges.
Crypto trusts were more secure and could be actively traded on the stock market, but they charged high fees. Bitcoin future ETFs also charged high fees, but they often failed to keep pace with the cryptocurrency’s actual spot prices. The Securities and Exchange Commission’s approvals in January of the first 11 spot price Bitcoin ETFs resolved those issues; the ETFs charge low fees, are directly tied to Bitcoin’s spot price, and can be easily traded on the open market.
Wood believes those new ETFs will drive institutional investors to buy more Bitcoin. Back in December 2021, Wood predicted that if institutional investors allocated an average of 5% of their portfolios to Bitcoin, it would boost its near-term price by about $500,000. Wood reiterated that bullish view earlier this month and said that institutional buyers would drive Bitcoin’s price to $1.5 million as it’s recognized as a new asset class.
Meanwhile, Bitcoin will undergo its next halving in April. That process, which occurs every four years, cuts in half the reward for miners like Marathon Digital to mint new Bitcoin — but it might help boost Bitcoin’s price as market demand outstrips its slowing supply growth.
At the same time, persistent inflation and escalating geopolitical conflicts could drive more countries to adopt Bitcoin as a mainstream currency. That trend could accelerate Bitcoin’s transformation into a reliable, safe asset like gold and silver.
Cathie Wood isn’t alone in her bullish view for Bitcoin’s future. The British bank Standard Chartered says its price will hit $100,000 by the end of 2024, while the financial services giant Fidelity predicts its price will reach $100 million by 2035 and $1 billion by 2038. It’s impossible to say if those predictions will come true, but the approvals of the first spot Bitcoin ETFs could set a floor under its volatile price.
So instead of wondering if Bitcoin will deliver a 2,000% gain in just three years, investors should simply ask themselves if they believe the bullish argument. If Bitcoin sounds like a promising investment, then it might be smart to accumulate some Bitcoin or shares of a low-fee spot price ETF as a long-term growth play.
Should you invest $1,000 in Bitcoin right now?
Before you buy stock in Bitcoin, consider this:
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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Coinbase Global. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.
1 Top Cryptocurrency to Buy Before It Soars 2,139%, According to Cathie Wood was originally published by The Motley Fool
Cryptocurrency hackers stole over $360 million during February, almost doubling the amount stolen in January. According to Peckshield, a cryptocurrency and blockchain security firm, the largest hack event in February involved a security breach in Playdapp, a Web3 gaming platform, that lost $290 million four days after being attacked. Fixedfloat, a cryptocurrency exchange, also lost […]
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Two individuals, a woman and a man, were captured in Argentina on charges of having perpetuated a Ponzi scheme that moved over $400 million in cryptocurrency in Brazil. The operation managed to track the couple’s whereabouts with the help of the Argentine Federal Police and Interpol. Argentina Captures Couple Accused of Orchestrating a $400 Million […]
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Cryptocurrencies are on fire in 2024. Since the year began, Bitcoin’s price has surged from $45,000 to more than $60,000.
If you’re a big fan of cryptocurrencies, buying them directly is a reasonable action. But there are ways to diversify your exposure while still betting big on their growth.
Investing in Block (SQ -0.28%) stock, for example, is arguably one of the best ways to profit from the growth of crypto.
Block is all in on cryptocurrencies like Bitcoin. The company, formerly known as Square, officially changed its name to Block in 2021 to reflect its commitment to blockchain technologies.
This name change was a long time coming. For years, the company had spent millions building cryptocurrency features into its payment networks. In 2020, the company invested $50 million directly into Bitcoin, roughly 1% of its total assets. “Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose,” the company explained at the time .
Today, buying stock in Block is a strong bet on the rising adoption of cryptocurrencies like Bitcoin. The company’s Cash App, for example, currently has more than 40 million users, millions of whom have used the app to buy, sell, and transact in cryptocurrencies as well as conventional currencies .
In the fourth quarter of 2023, Block generated $5.8 billion in revenue, up 24% from the year before. The biggest growth driver was Bitcoin revenue, which totaled $2.5 billion. Without Bitcoin revenue, the company’s sales increased by just 15% year over year .
What exactly does Bitcoin revenue include? The term captures the total amount of Bitcoin sold to customers. This is not a very profitable business right now as Block’s costs must first cover the initial Bitcoin purchase, but the figures signal the company’s future.
Through its Cash App and other properties, Block wants to become a central hub for everything crypto. It not only wants to become a trusted Bitcoin seller, for example, but also a lender and enabler of blockchain technologies in general. That’s why Block is funding several initiatives like Spiral, which builds open-source Bitcoin projects, and TBD, an open-developer platform that makes it easier to build with Bitcoin.
Even Block’s ownership of Tidal, the music streaming service, is a bet on Bitcoin. The creator economy is now deeply entrenched within the internet economy. And as Block Chief Executive Officer Jack Dorsey once explained, the “internet requires a currency native to itself, and in looking at the entire ecosystem of technologies to fill this role, it’s clear that Bitcoin is currently the only candidate.”
Block stock should be viewed as a long-term bet on the rise of cryptocurrencies. But there is reason to believe that right now provides an exceptional entry point.
For years, Block was priced as an expensive growth stock. On a price-to-sales basis, shares regularly traded at a multiple between 5 and 15. After a steep decline, however, shares now trade at just 2.2 times sales.
Why did Block’s stock price decline so much in 2022?
Although the company continued to post impressive growth numbers, Bitcoin’s price fell precipitously, casting doubt on the company’s long-term vision. Additionally, the company posted several quarters of huge losses, some totaling more than $200 million.
Last September, founder Jack Dorsey rejoined the company as chief executive officer, promising to trim expenses and return the company to profitable growth. His promises have achieved early success. In 2023, the company posted $10 million in net income. That’s not very impressive until you compare it to 2022’s net loss of $541 million .
It will take time for Block’s ultimate vision to be realized, but it appears to have the technology, vision, and management in place to benefit from the long-term rise of cryptocurrencies. The current depressed valuation may not last for long.
Just recently, the 45th President of the United States, Donald Trump, has expressed a neutral stance towards bitcoin, stating he could live with it “one way or the other.” Meanwhile, Trump’s holdings in crypto assets have seen a significant increase in value. A substantial portion of his digital wealth is currently in a digital currency […]
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Navigating the crypto landscape can be a challenge, especially in a bull market when just about every cryptocurrency seems to be rising. With myriad options promising life-changing gains, cutting through the noise is no easy task.
For investors looking to find some clarity in a crowded field of options, the best strategy is often the simplest. As with the stock market, it is possible to spread your crypto portfolio too thin, inevitably introducing unnecessary risk.
One cryptocurrency stands out as deserving a $1,000 investment today: Bitcoin (BTC 0.07%). While this pick may lack originality, its historical performance, market dominance, and unique characteristics make it a standout choice that no other cryptocurrency can match.
Image source: Getty Images.
There is a laundry list of arguments that portray Bitcoin as a risky and volatile asset undeserving of an investment. Although short-term fluctuations are real, a long-term perspective reveals Bitcoin’s attractiveness as a robust investment.
Bitcoin has proven itself as the top-performing asset during the past 15 years. Driving much of this performance is Bitcoin’s robust monetary policy. Centered around an event known as a halving, Bitcoin’s supply growth rate is cut in half every four years. This process will continue until the last Bitcoin is mined in about 2140, at which point the cryptocurrency will enter unprecedented territory.
With the upcoming halving in April, Bitcoin will see its supply growth fall from 1.75% a year to just 0.85%. Historically, in the year of a halving, Bitcoin’s price jumps by 120% on average as demand is forced to compete for a tightening supply. Only time will tell if 2024 follows patterns of years past, but even if this year turns out to be an anomaly, Bitcoin’s long-term value should stay on a positive trajectory considering trends of increasing adoption and continued reductions to its supply growth as more halvings pass.
For those seeking simplicity in their crypto portfolio, few options are more appealing than Bitcoin. As of Feb. 22, the entire crypto asset class was valued at about $2 trillion. Of this, Bitcoin makes up more than $1 trillion. Its closest rival is Ethereum, worth just $360 billion.
Due to this disproportionate valuation, the vast majority of other cryptocurrencies are highly correlated to Bitcoin’s price. In other words, if Bitcoin’s value rises or falls, the values of most cryptocurrencies will follow suit.
Although other cryptocurrencies may occasionally outperform Bitcoin, they usually possess much greater volatility and risk. During bull markets, some of these cryptocurrencies may rise at a faster clip, but when bear markets set in, the drops become much more severe. While Bitcoin might not produce the 10,000% return that new cryptocurrencies sometimes see, it provides simple and comprehensive exposure to the entire asset class with considerably less risk.
We can’t talk about Bitcoin without discussing how it has risen to become the most valuable cryptocurrency. Surely its position as the first cryptocurrency to be invented gave it a head start, but the main reason it has maintained this position for roughly 15 years has to do with the distinct characteristics that set it apart from any other cryptocurrency.
Bitcoin is the quintessential cryptocurrency. It is the most decentralized, secure, and durable blockchain ever invented. With more than 17,000 nodes globally and estimated to be 500 times more powerful than the best supercomputers in the world, Bitcoin is virtually un-hackable. Best of all though, it has been able to achieve this without any centralized figure or entity overseeing it, a feat no other cryptocurrency can claim.
While Bitcoin may lack the glamor of newer cryptocurrencies, its unparalleled track record positions it as a formidable long-term player. Just like the stock market, survival of the fittest reigns in the crypto realm, and Bitcoin has proven why it is the ultimate survivor.
For those with an extra $1,000 at their disposal and looking to gain some exposure to crypto, there’s no better option than Bitcoin. Save yourself the hassle, appreciate the beauty in simplicity, and discover how an investment in Bitcoin could be your closest route to long-term portfolio growth.
Bitget, a top 15 cryptocurrency exchange, is seeking to expand its operations in Latin America, a market traditionally dominated by incumbents like Binance and Bitso. Maximiliano Hinz, Bitget’s growth director for Latam, believes that the exchange can differentiate by focusing on serving beginner investors with tools like its copy-trading feature. Bitget Aims to Gain Traction […]
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