Should you buy Ethereum while its price is under $3,500?

As of January 16, it is done Ethereum (Ethereum -5.78%) The value of the cryptocurrency has risen by 37% in one year. However, it has been a rough ride along the way, with coin prices ranging from $2,220 to $4,070. Finally, the second-biggest name in cryptocurrency has managed to outperform a previously stellar performance Standard & Poor’s 500 Stock market index during the same period.

Ethereum It’s worth about $3,333 per coin as of this morning. I love the alliteration and recurring patterns, but the cryptocurrency won’t stay at this attractive price for long. (In fact, it’s actually changed since I wrote this down – it’s hard to keep up with these volatile prices.) Digital assets.)

But none of this matters if you’re thinking about becoming an Ethereum owner. What it does is whether the smart contract platform is ready to go higher, or whether it peaked 10 months ago.

Fast and easy forecasts

Ethereum has reached over $3,500 several times before. It reached this level on at least seven occasions in 2024, briefly topping $4,000 in May and December. These highs didn’t even set records – Ethereum’s all-time high was a brief visit to $4,892 in November 2021.

A simple review of the cryptocurrency price chart indicates that it follows a four-year cycle of Bitcoin (Bitcoin -0.32%) Half events. Ethereum prices tend to rise about a year after each Bitcoin halving, rise significantly for another year or so, and then decline amid the crypto winter. If the market were to repeat this pattern, in terms of timing, Ethereum and other cryptocurrencies are in the early stages of a new bull market.

However, there are several problems with analyzing a quick glance at a chart.

• As with stocks, Ethereum’s past results are no guarantee of its future performance.
• Every Bitcoin halving cycle has been different from the one before it, and this one is no exception. Several price-boosting events impacted Ethereum last year, which could undermine its ability to make short-term gains in 2025.
• Ethereum has a fairly short chart history to look at. This is only the third cryptocurrency market cycle since Ethereum was introduced in 2014. Investors probably shouldn’t draw conclusions based on this limited data set.
• This brings me back to the first point – zigzag charts from the past can’t really tell you what’s next. Technical analysis It is neither an art nor a science, but more like gambling. I do not recommend making investment decisions based on such a weak assumption.

More powerful analysis

Let’s forget the price chart for a minute. What’s actually happening with the Ethereum project, and what could it mean for owners, users, and investors in the long term?

Both Bitcoin and Ethereum are essentially encrypted transaction ledgers, managed on publicly available computer networks. But they serve fundamentally different purposes.

Bitcoin offers a digital currency that can be used for payments, and its value should rise over time due to high demand and very limited supply.

Ethereum is the functional currency of a massive global computer. Smart contracts The transactions embedded in its transactions are executed automatically, performing a wide range of digital functions based on real-world data. This function is the core Decentralized finance DeFi systems, which transfer financial operations from banks to your smartphone.

As such, the value of the currency does not depend on strict supply constraints. It’s all about smart contracts finding many use cases, millions of daily users, and a huge volume of actual Ethereum transactions. Each transaction triggers something to happen in someone’s blockchain wallet, in a decentralized game, etc. – and transactions are executed Gas fees. Some of the tokens used to pay these fees are “burnt” — has been permanently removed from circulation. The rest goes to the holders Stake their Ethereum coinsgiving them the opportunity to validate transactions on the blockchain and keep them safe. Most importantly, you can pay additional gas fees to execute your smart contracts faster, leading to significant price increases when Ethereum-based applications become mainstream.

Furthermore, Ethereum is always updating its software. Upcoming improvements include tighter security measures, changes that should lead to cheaper transaction fees, and the technical underpinnings of upgrades that will be game-changing down the road. These enhancements will be required in order to fend off challenges posed by newer, faster smart contract platforms. It would be a shame to build a global market for decentralized applications, just to see Solana (encryption:sol) and Cardano (encryption: ADA) Reap all the long-term benefits of your business.

What this overview misses is a timeline for DeFi applications to take off. With or without the help of price trends determining Bitcoin’s duration, Ethereum’s true value won’t become clear until we see the first killer applications of the DeFi and Web3 movements.

Why Ethereum looks ready to go

It is difficult to assign an appropriate value to a digital transaction tracking network, especially in a rapidly changing market with many reliable alternatives.

However, I am convinced that DeFi and Web3 It will revolutionize personal finance around the world. Disable The massive banking industry It will be a heavy burden, but it may also be inevitable. The financial systems you use every day in 2025 have been around for decades or even centuries, and there are better tools available these days.

Despite having a large number of competitors, Ethereum remains the leader in the smart contract pack. Many signs indicate a healthy user community. More than half of the total value of cryptocurrencies found in app development projects belongs to the Ethereum market. There are nearly 300 million active Ethereum addresses, compared to 130 million four years ago.

the Network effect This rapidly expanding user group should boost the value of Ethereum over time. According to Metcalf’s Law, the value of any network grows in proportion to the square of the number of people participating. This value formula was originally applied to telecommunications networks in the 1980s, but has also been applied to the Internet, social networks, airport networks, and financial services.

In this regard, I expect Ethereum’s real-world value to rise as more people embrace its quick and inexpensive solutions to age-old financial problems. I can’t promise that $3,333 is the best purchase price ever; I still see a bright future for this cryptocurrency community in the long term, and the coin should build value over the years.

The price of Ethereum may or may not rise in 2025, but that doesn’t really matter. I suggest holding this cryptocurrency for the long term.