Early retirement seems unlikely given the current market conditions, in which Ethereum (ETH -3.04%), along with the rest of the cryptocurrency market, is probably not encouraging people to retire early. This year has been a difficult one for crypto. Inflation and concerns about the economy have caused investors to seek out secure investments, thus riskier areas like cryptocurrency have gotten worse.
This might appear to be a negative situation. However, it’s important to remember that economic difficulties and market downturns do not last indefinitely. This implies that certain strong crypto companies may recover and even outperform in the future. Could Ethereum help you retire early based on this information? Let’s have a look at it.
One of the biggest blockchains
To begin, let’s take a look at Ethereum today. It’s one of the most well-known and popular blockchains in the world. In fact, it is the second-largest crypto by market value, right behind Bitcoin.
Ethereum is a pioneer in non-fungible tokens and decentralized applications. According to State of the dApps, over 2,900 dApps run on Ethereum. And according to CryptoSlam data, it’s also the most popular blockchain for NFTs by sales volume.
Ethereum is also a leader in terms of the number of developers that are working on its blockchain. According to Electric Capital research, they numbered over 4,000 late last year. That’s up by 42% from earlier in the year. This is significant because it demonstrates that developers are becoming increasingly active with the blockchain.
Gas is the most important issue with Ethereum right now, and as a result, transaction fees are excessive. However, this may soon change. Ethereum has implemented a major upgrade. It consists of several phases. The switch to proof of stake validation will boost speed, reduce costs, and use less energy. Furthermore, users will be able to stake their assets using this method of validation.
The merge may happen soon
The transition is expected to begin in the next several months, with what’s called “the merge” at its core. Sharding will be implemented as part of future phases of the upgrade in an effort to improve efficiency and speed. This divides up the workload in order to alleviate congestion.
As a result, Ethereum has a lot of practical applications and is contributing to the evolution of business. The fact that it is already a leader gives it an edge over the newer players. And if the upgrade succeeds, Ethereum will have overcome its most pressing issues.
Now, let’s take a look at Ethereum’s performance over the last several years. Over the previous five years, the cryptocurrency rose by around 1,800 percent. However, it has also had large drops on occasion during that time period.
It’s accurate to say that the cryptocurrency market is volatile. Ethereum, on the other hand, has shown that it may produce significant gains over time. Those who invested in Ethereum five years ago and have been holding on are enjoying a return of more than 400 percent.
Let’s return to our initial question: Is this crypto giant capable of allowing you to retire early? Perhaps. It is dependent on the time you buy and sell Ethereum. Those who acquired many years ago, for example, may probably sell their investment today and retire early.
If you invested in Ethereum toward the end of last year, don’t be discouraged. In cryptocurrency, losses are rapid. However, gains and losses occur at the same time. Your stake may rebound faster than you anticipate.
Naturally, crypto is an uncertain industry. It’s new – and we have no idea what kind of role it will play in years to come. However, if crypto continues to gain popularity, Ethereum may reclaim its position as the industry leader. And that implies that it might enable some long-term investors to retire early.