Ethereum? by WJ Vincent II

Wow, anyone that has been following the crypto markets has to have their head spinning right now.  A very short Time Ago, last March 16th (2020) Ethereum was trading at only $107.90 per coin.  Today At the moment I am writing this blog Ethereum is trading at $3,373.  That means that in less than 14 months time…if you had invested $1079 to buy 10 coins your investment would be worth $33,730 right now.  We haven’t seen crazy returns like this since the heady days of the Internet Boom.  There is very little rationale in the market right now, so let’s try and make some sense for you of what is going on.

Disclaimer
None of the information, or discussion contained within this article/blog should be construed as Financial Advice.  As always consult with a financial advisor before making any actual investments.  All of our information is meant to be purely educational and informative, and we repeat is not meant to be actual financial recommendation.

Fed Printing Money – Government Stimulus
As we have previously discussed, the US government has been printing a LOT of money, for a long time now.  We have not yet begun to experience the long-term effects of this, which will most likely be inflation.  One of the first things that Biden did upon becoming president was to immediately reduce the “supply” of oil in the market by cancelling large pipeline projects, and limiting the use of our own Oil and Gas Production.  We are already beginning to feel prices creeping up at the gas pump….heating and cooling our home prices are going up, and due to the immediate transportation cost increases everyone from Proctor and Gamble to General Mills, and everyone in between have announced the largest price increases since 2012 (Reference), and this is probably just the beginning.  The stimulus checks have created a rise in savings rate, with a huge number of people choosing to invest half or more into stocks and cryptocurrency (NyTimes).  In fact it is estimated as much as $170 Billion is flowing into the stock market and cryptocurrency from these checks!

Difficult To Call the “Top”
One thing that is for certain, it is almost impossible to tell when a stock or currency has reached a short-term “Top” or peak of price that will result in a trend down.  There are tons of “technical analysts” that are giving advice right now, but again, this is data that can be useful, but is not always correct either.  Right now, the general market trend has been “UP” which is known as a Bull Market for at least a Year, and since 2009 according to your definition (Investopedia). As a general rule, we should be investing in things that are real, that have a definite future, and that we can put money into regularly.  Regularly investing helps to accumulate larger positions over time.  It removes the short-term implications of buying too high, because you are essentially always buying.  Sometimes you pay higher prices, sometimes you pay lower, but it all averages out over time.

Don’t Get Caught Up Too Much In The Hype
A lot of people are caught up in the excitement right now and throwing money into crazy things like DogeCoin…admittedly many of them are making a lot of money, but this is what is called “Gambling” not Investing.  The stock or crypto has no real value, it is simple speculation.  If you want to put money into things like that, make sure it is money you are comfortable losing, because at some point this little roller coaster ride will come to an end.  Investments like Ethereum, however, have real and strong long-term value.  Think of the Cryptocurrency like the Computer, Banking, or Auto Industries.  Big industries that will produce more than one successful long-term entity.  Microsoft and Apple, Chase and Bank Of America, Ford and Tesla to give you some examples.  Most of the smart people I know, and almost all of the long-term investor advisors I follow believe that Ethereum at the very least will be right behind BitCoin in the Crypto Currency Market, some believe it will one day surpass it.  That means that even at these crazy prices Ethereum is probably still a solid long-term investment, albeit one with large short-term risks.  It is entirely possible that Ethereum will retrace its lows…some believe it will hit $1500 again, before eventually going above $10,000 longterm.

Be Smart
Nobody knows the answer, all we can do is invest as smart as we can, and make our investing a regular thing we do, every month.  Do your homework, follow the macro events that can effect any market you invest in, and be sure to think “Long Term”.  Trying to time the short-term trading ranges can be a recipe for disaster.  I know plenty of people who have successfully made one or two trades only to lose everything the 3rd time they tried to buy and sell.  Warren Buffet is the most successful investor of all time, and he believed in the buy and hold, buy more if you can strategy.  Good Luck with all your investments, and remember, this is just an opinion article.  None of this should be construed as actual financial advice.  Do your own research, and keep track of what is happening.  Smart, well researched, on top of what is happening investors almost always do better than the ones just hoping it all works out in the end!  Great Luck and Success to Everyone!