Could Ethereum Help You Retire Early?

Ethereal (ETH -3.66%), along with the general cryptocurrency market, is probably not making investors think about early retirement right now. The crypto giant has lost more than 60% this year. Amid rising inflation and concerns about the economy, investors are looking for the safest investments. That means riskier areas like cryptocurrency have been suffering.

This may seem bleak. But it’s important to remember that economic problems and market downturns don’t last forever. That means certain strong crypto players can bounce back and even post big profits in the future. Given this, could Ethereum eventually help you retire early? Let’s find out.

One of the largest blockchains.

First, let’s take a look at Ethereum today. It is one of the largest and most popular blockchains out there. It is actually the second largest cryptocurrency by market value after Bitcoin.

Ethereum is a leader in decentralized applications (dApps) and non-fungible tokens (NFT). More than 2,900 dApps run on Ethereum, according to State of the dApps. And it is the largest blockchain by sales volume for NFTs, data from CryptoSlam shows.

Ethereum is also a leader when it comes to the number of developers working on its blockchain. They totaled more than 4,000 at the end of last year, according to Electric Capital research. That is 42% more than at the beginning of the year. This is key because it shows that developers are using blockchain more and more.

The main problem with Ethereum at the moment is the slow transaction speed and thus the high transaction costs. But this may soon become a thing of the past. Ethereum has released a major update. It includes several stages. is to change to proof of stake transaction validation method from proof of work. This validation method will increase speed, reduce costs, and use less energy. And it will also allow users stake your possessions.

The merger may happen soon

The change, known as “the merger,” is expected to happen in the coming months. Later stages of the update will include the introduction of sharding to further optimize operations and increase speed. This divides the workload to reduce congestion.

So Ethereum has many real-world uses and is doing its part to transform the way business is done. The fact that you are already a leader gives you an advantage over new players. And if the upgrade goes well, Ethereum will remove its biggest problems.

Now, let’s see how Ethereum performed before this year. The cryptocurrency has skyrocketed as much as 1,800% in the last five years. But it has also posted periods of big losses from time to time during that period.

It is fair to say that Ethereum and the cryptocurrency market in general can be quite volatile. However, Ethereum has shown that over time it can make huge profits. Those who bought Ethereum five years ago and are still holding on are benefiting from an increase of more than 400%.

Early retirement?

Back to our original question: Could this crypto giant help you retire early? Possibly. It depends on when he buys Ethereum and when he sells. For example, those who bought several years ago could probably sell today and retire early.

However, if you bought Ethereum late last year, don’t be discouraged. Losses happen quickly in the crypto world. But so do profits. Your investment may recover faster than you expect.

Of course, cryptocurrency is still an area of ​​risk. It is new, and we do not know what role it will play in the coming years. But if cryptocurrencies gain more and more momentum, Ethereum could keep its place at the head of the pack. And that means it can help some long-term investors retire early.

Adriana Cimino has positions in Ethereum. The Motley Fool has positions and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.