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The Best Cryptocurrency to Buy with $1,000 This Summer
After a strong start to 2024, the cryptocurrency market has suddenly fallen by nearly 20% in the past month. While still well within bull market territory, the recent correction could present an attractive opportunity for investors looking to add to their exposure.
However, not every cryptocurrency is cut from the same cloth. Just because there is a widespread correction doesn’t mean any cryptocurrency is worth your hard-earned money. While some may meet this criteria, one in particular stands out from the crowd — Ethereum (CRYPTOCURRENCY: ETH).
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Pending approval of spot Ethereum ETFs
Cryptocurrency has come a long way in the last decade and a half, culminating in the recent approval of Spot Bitcoin ETFs in January. A spot Bitcoin ETF allows investors to buy and sell shares that represent real stocks Bitcoin (CRYPTO: BTC) on the stock market. This not only serves as a de facto stamp of legitimacy, but also opens up the underlying asset (in this case, Bitcoin) to a wider range of investors, specifically those who prefer the regulated environment of traditional financial markets.
Bitcoin ETFs have hit a milestone so far, with one of the most successful ETF launches in history. In the hopes of snagging the next big thing, attention has shifted to Ethereum.
There are currently eight applications under review by Securities and Exchange Commission (SEC) to grant approval for an Ethereum spot ETF. While these processes can be laborious, the consensus is that they will gain approval sometime this month and, in the worst-case scenario, by the end of the summer.
Why does this matter?
The approval of spot Ethereum ETFs will undoubtedly have a significant impact. First and foremost, it will open up Ethereum to new buyers and money, much like we are seeing with spot Bitcoin ETFs. Most notably, institutional investors. Known for their deep pockets, with a regulated and secure way to gain exposure to Ethereum, the expectation is that there will be an influx of institutional capital that could increase demand and, consequently, the price of Ethereum.
Take a look at Bitcoin as evidence. When Bitcoin ETFs were approved, Bitcoin surged 50% in just three months after approval, showing the potential impact on Ethereum.
However, while there is no way to estimate the full impact of spot ETFs in the long term, there is some clear and compelling evidence that could show where Ethereum is headed in the short term.
In early May, many analysts estimated that the chances of an Ethereum spot ETF being approved were less than 25%. However, things changed quickly just a few weeks later.
The story continues
On May 20, reports began circulating that the SEC was changing its stance and planning to grant approval. Within hours, Ethereum jumped more than 20%, from roughly $3,000 to $3,800. Fast forward a month or so, and now Ethereum has fallen victim to the broader cryptocurrency sell-off that has occurred, with its price now back at around $3,100.
You can see where this is going. ETF approvals are likely a matter of when, not if. Once they are approved, it would probably be safe to assume that Ethereum should at least rally again by 20%, as that is how the market reacted when initial reports of approval began circulating. While 20% may not be huge in the crypto world, it is still a commendable return and one that could just be the beginning of a more significant upward trend.
The opportunity at hand
The ETF news is incredibly bullish for Ethereum, not just in the short term but also in the long term. However, this is just one aspect of Ethereum’s value proposition.
Ethereum is one of the most proven blockchains with clear utility over the years. It is the primary blockchain for DeFi, one of the most prominent and innovative use cases in crypto, with over 60% of the digital economy calling Ethereum home. Additionally, it has recently attracted people like Black stonewhich is pioneering the tokenization of real-world assets on the Ethereum blockchain.
All of these factors combined make Ethereum an ideal cryptocurrency investment this summer. Pending ETF approvals, coupled with its proven utility and growing institutional interest, position Ethereum as a standout in the cryptocurrency market. Investing in Ethereum now could offer substantial returns as the market recovers and new opportunities emerge.
So while the recent market correction may have caused some hesitation, it’s important to look at the bigger picture. Ethereum’s robust ecosystem, ongoing developments, and potential for ETF approval make it a compelling investment and the ultimate cryptocurrency to buy with $1,000 this summer.
Should You Invest $1,000 in Ethereum Right Now?
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RJ Fulton has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.
The Best Cryptocurrency to Buy with $1,000 This Summer was originally published by The Motley Fool