If You Invested $100 in Ethereum, Here's How Much You'd Have Now | The Motley Fool (2024)

It's no secret that crypto has been struggling over the last couple of years. And after a whirlwind surge in 2023, prices are falling yet again.

However, many cryptocurrencies have still proven to be incredibly lucrative long-term investments. For example, while the price of Ethereum (ETH -0.65%) has fallen by around 11% over the last month, it's still up more than 300% over the last three years -- and that's despite the brutal crypto winter throughout 2022.

If crypto prices rebound, we could see similar gains over time. And while past performance doesn't predict future returns, it can sometimes be encouraging to look at how much you could have earned if you'd invested years ago.

How far could Ethereum have taken you?

Ethereum is one of the biggest success stories to come out of the crypto market. Despite extreme volatility, it remains the second most popular name in the industry. It currently has a market cap of around $198 billion, making up around 20% of the entire crypto sector.

While it certainly hasn't been immune to volatility, it's also fared better than many of its competitors. Its price is currently down by around 65% from its peak in late 2021, while Cardano has fallen by a staggering 87% in that time, and Solana has plummeted by around 91%.

For long-term investors who stuck it out through the rough patches, Ethereum has been a lucrative investment. Here's how much $100 of Ethereum would be worth today, depending on when you'd invested:

Data source: YCharts.

The short term can be rocky for crypto, and if you'd invested in late 2021 right before prices plummeted, your investment would have declined in value. But if you'd invested just four years ago and held through all the ups and downs, you'd have nearly 8 times your initial investment by today.

Is Ethereum a good investment right now?

Again, past performance doesn't predict future returns. There are never any guarantees when investing, and this is especially true with crypto due to its speculative nature. No one can say, then, whether Ethereum will continue on its track of explosive long-term returns.

That said, Ethereum is one of the strongest players in the crypto space, and it has a slew of advantages. Its sheer size is one of them, as it's far and away the most popular network for decentralized applications -- such as NFT marketplaces, DeFi projects, and metaverse apps.

Ethereum's developers are also committed to consistently upgrading the blockchain to make it stronger and more useful. Last year, they successfully pulled off The Merge -- a landmark upgrade that moved Ethereum from the energy-intensive proof-of-work system to the far more efficient proof-of-stake model.

The Surge is one of the next eagerly awaited updates, and it aims to improve the network's speed and reduce transaction fees. These have long been two major pain points for Ethereum, and if developers are able to successfully pull off this update, it could be a game-changer.

Downsides to consider before you buy

While Ethereum has plenty of advantages, it won't be right for every portfolio.

Like the crypto industry in general, Ethereum is still a speculative investment. Although it does have a fair amount of utility (especially compared to many of its competitors), its primary uses are also somewhat speculative right now. If NFTs, DeFi, or the metaverse become more mainstream, for instance, Ethereum could thrive. But if they never catch on, it could spell trouble.

Much of Ethereum's future success also hinges on its upcoming upgrades. If those updates take longer than expected to complete or there are significant hiccups during the rollouts, that could shake users' confidence -- and provide an opportunity for competitors to swoop in and grab market share.

In short, Ethereum is still speculative, but it's also one of the strongest investments in the crypto space right now. If you're willing to take on more risk for the chance to earn potentially lucrative returns over the long run, it may be a smart addition to your portfolio.