Ethereum: 3 Reasons Why ETH Is a Safe Long-Term Investment

Vinod Dsouza
ethereum eth

Ethereum plays a crucial role in the cryptocurrency sphere making it command the center stage of the overall blockchain technology. ETH is the world’s second-biggest cryptocurrency with a market cap of $187 billion and has generated enormous profits for investors during its hay day. From a modest start of $1 in the indices in 2015 to touching a high of $4,878 in 2021, ETH has created millionaires along the way. Despite the dip in 2022, ETH remains to be a safe long-term investment as it boasts various use cases in the Defi sector.

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Here’s Why Ethereum Is A Safe Long Term Bet

  1. Highest Developer Activity

Ethereum is always buzzing with developments as it receives the highest developer activity compared to other Layer-1 blockchains. Despite the market downturn, the blockchain experienced an increase in activity and a spurt in projects supporting the DeFi cause. Around 5,750 developers work on different smart contract platforms adding 234 new developers between December 2021 and 2022 alone.

Electric Capital published data showing that Ethereum’s developer activity is 2.8x higher than its competitor PolkaDot. The network is always brimming with activity making it the centerpiece of decentralized blockchain technology.

Also Read: Ethereum Price Prediction: Is ETH Gearing Up to Reach $1,800?

Source: Electric Capital
  1. The ETH Deflationary Status

The Ethereum network went from Proof-of-Work to Proof-of-Stake protocol after The Merge in September 2022. Since the Merge, around 2,464 ETH have been burned and removed from circulation. If Ethereum remained as PoW, it would have added 1.48 million ETH to the network.

  1. The ETH Staking

The staking option is now enabled after the Ethereum network moved from PoW to PoS last year. Since then, 16 million ETH is staked and the present staking returns are around 5.3% Annualized Percentage Rate (APR). ETH being a deflationary asset with staking yields, many investors would earn passive income throughout the tenure. The total staked amount would go much above 16 million in 2023 putting the tokens constantly to work.

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In conclusion, all these developments make Ethereum a safe long-term bet that could pay off in the long run.

At press time, ETH was trading at $1,549 and is up 2.1% in the 24 hours day trade. ETH is down 68.2% from its all-time high of $4,878, which it reached in November 2021.