Since the eagerly anticipated Merge was finalized on September 15, 2022, Ethereum’s value has been vulnerable. After the Merge, the cryptocurrency’s value steadily dropped from $1,600 to below $1,300. But in late October 2022, for the first time since the Merge, the token’s price exceeded $1,500.
Ethereum is currently trading at $1,594 as at time of this article. Since reaching an apparent low in June, the currency has recovered, but not without experiencing some dramatic swings. Bitcoin has also increased by more than 5%.
With cryptocurrencies being so volatile, it is natural to be concerned about investing in these assets. So let’s look at whether buying Ethereum at its current price is worth your hard-earned money.
Investing in Ethereum
Initially, the price of Ethereum and other cryptocurrencies fluctuated along with the market. Cryptocurrency and the conventional markets, though, had decoupled by October. The general markets started to decline yet again as inflation concerns reappeared. Yet, amid the biggest liquidation of short positions in 15 months, the cryptocurrency market kept moving upward.
Prices first rose due to a run of promising earnings reports and market expectations that the Federal Open Market Committee (FOMC) of the United States could soon begin to taper off rate increases. Dollars and bond yields, typically safe places during inflationary periods, fell while the Nasdaq Composite, in which cryptos have been trading in sync through much of 2022, increased by about 2%.
Cryptocurrency has remained robust despite market fluctuations. Long-term owners’ resilience may be partially responsible for cryptocurrency’s current stability, but it’s unclear whether that resilience will last. The end of the year will be quite volatile. With the Federal Reserve meetings and the general elections, Ethereum prices may also experience greater volatility.
On the other side of the debate, some information may be read as traders being wary and taking advantage of the current uptrend by pulling money while they still exist. Be In Crypto published this insight, citing deeper lows on the daily charts made by prominent Ethereum holders.
It was claimed that the price increase might have been artificially caused by major Ethereum owners, or “whales,” depositing massive sums of the cryptocurrency on exchanges, driving up prices. Furthermore, Ethereum may have temporarily struck a price ceiling, allowing sellers to make additional gains during the pinnacle of the cryptocurrency’s advance before the value of the currency fell once more.
According to several cryptocurrency insiders, investors may wish to consider macroeconomic variables like inflation and governmental cryptocurrency restrictions while deciding on their investment plans for the remainder of this year. Bitcoin’s early supporters, who stated that cryptocurrencies would act as an inflation hedge, have not demonstrated this to be the case.
As evidenced by these most recent actions, many coins, especially ETH, have instead started to move in sync with risky stocks like those traded on the NASDAQ. This indicates that pressure on the price of ETH has been applied by macroeconomic variables like inflation and may still be present. As a result, many investors will turn to resources like gold and oil in an inflationary climate and be less inclined to put their money in speculative financial products like cryptocurrencies.