ETH

Ethan Allen Interiors Inc.

26.30
USD
-1.13%
26.30
USD
-1.13%
13.14 32.15
52 weeks
52 weeks

Mkt Cap 662.68M

Shares Out 25.20M

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Should You Really Buy This Crypto Now or Should You Wait?

Over the past five years, Ethereum (CRYPTO: ETH) has produced a monster return of 526% (as of this writing), crushing the S&P 500 and even Bitcoin (CRYPTO: BTC) during the same period. But close followers of the cryptocurrency market know that Ethereum has been stymied by its inability to scale well, resulting in exorbitant fees when demand for the network is high. This is undoubtedly getting in the way of the platform's growth. Luckily, Ethereum developers have long been working on something called the Merge, which will transition the network to an environmentally friendly and scalable proof-of-stake (PoS) consensus mechanism. Vitalik Buterin, one of Ethereum's founders, has said that Sept. 15 could be the day that the Merge will happen, after which ether (ETH), the Ethereum blockchain's native currency, could soar. So is now the right time to buy Ethereum, or should investors wait until after the Merge happens? Let's take a closer look. The promise of the Merge Throughout its history, Ethereum, like Bitcoin, has operated on what is known as a proof-of-work (PoW) consensus model. This means that large amounts of energy and computing power are needed to solve math problems to validate and add transactions to the blockchain. This process is slow, expensive, and doesn't allow for a lot of transaction throughput. As a result, the Merge, an event that will connect the Beacon Chain PoS network with Ethereum's current PoW model, is planned for completion in mid-September. It should be like swapping out Ethereum's current engine for a new and improved one. While many Ethereum supporters have long waited for this to happen, there have been multiple delays in implementing The Merge. Furthermore, there is no guarantee this will bring about huge changes. In fact, according to the official Ethereum website, there are some major misconceptions floating around. In particular, transaction fees and speeds aren't actually expected to improve, which would probably come as a shock to most people. The only thing The Merge brings about is a change in the consensus mechanism, not expansion of the network's capacity or throughput. What's more, the Merge isn't the only change that's planned for the Ethereum blockchain. Over time, there will be more upgrades, called the Surge, Verge, Purge, and Splurge. These steps are all part of Ethereum's evolution, Buterin claims, but they do add risks that ETH token holders need to be aware of. Not only could these changes divide the community into those who support the moves and those who don't, but the possibility of faulty software could alter the functioning of the whole network. Over the past month, Ethereum's price has skyrocketed 58%, compared to 16% for Bitcoin, a clear indicator that investors are optimistic about what's to come. Investors should layer in Ethereum's market capitalization is about $225 billion, making it the world's second-most-valuable cryptocurrency. Clearly, it was already a top digital asset before the Merge was on the horizon. The network was the first to introduce smart contracts, a feature that adds incredible functionality to the blockchain and opens up the potential for decentralized applications (dApps), particularly with decentralized finance protocols and non-fungible token marketplaces. And this innovation was certainly enough to catch the attention of investors from the beginning. The Merge is definitely a promising event in Ethereum's history, but investors should avoid trying to trade around it. As with investing in stocks, I think the right approach here is to simply employ dollar-cost averaging, buying small sums over time to build a position in your portfolio. That is, of course, if you're bullish on crypto and Ethereum over the long term. It's never a good idea to try to time the market. Dollar-cost averaging is a good strategy, regardless of what happens in the next month or so with the arrival of the Merge. Furthermore, the Merge has been delayed numerous times before, so I think it's probably best to avoid waiting for its arrival before buying. If you wait, you risk any possible gains that could be had while you sit on the sidelines. And ultimately, if we zoom out and keep our eyes on the big picture, it's clear that Ethereum's success (and price appreciation) depends on its potential to achieve wider adoption, something that the Merge can help accelerate. 10 stocks we like better than Ethereum When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* They just revealed what they believe are the ten best stocks for investors to buy right now... and Ethereum wasn't one of them! That's right -- they think these 10 stocks are even better buys. *Stock Advisor returns as of August 11, 2022 Neil Patel has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Today’s Big Picture Asia-Pacific equity indexes ended today’s session mixed. Hong Kong’s Hang Seng fell 0.67%, China’s Shanghai Composite ended the day essentially flat, down a mere 0.02% while Australia’s ASX All Ordinaries gained 0.50%, Taiwan’s TAIEX advanced 0.84%, and Japan’s Nikkei rose 1.14%. India’s markets are closed to mark the country’s Independence Day holiday and South Korean markets are closed today to mark that country’s Liberation Day. Interestingly, Liberation Day is celebrated in both South and North Korea. By mid-day trading, major European equity indices are up moderately, and U.S. futures point to a down open later this morning. Following the robust movement in equities over the last few weeks, as we start the new week off, they look to give back at least some of those gains. The surprise rate cut by the People’s Bank of China this morning raises fresh questions over the speed of the global economy, especially after July economic data for China missed expectations. Even though we have a sizable downshift in the number of companies reporting their quarterly earnings this week, we see a meaningful pivot toward retail companies, the majority of which were plagued with bloated inventories when they reported their prior quarter. Expectations are for margin and bottom line pain as they look to clear out those inventories in time to prepare for the important holiday shopping season. As these reports roll in, we’ll know how bad the pain is and whether consumers are biting. Data Download International Economy The People's Bank of China surprised by cutting its one-year lending facility rate by 10 basis points to 2.75% and cut the seven-day lending rate, the same amount to 2%. The move preceded weaker than expected July data for the country. China's July Industrial Production rose 3.8% YoY, below the expected 4.6%, and slightly lower than June’s 3.9% figure. Retail sales increased 2.7% YoY in July below the 5% forecast. Manufacturing hubs and popular tourist spots imposed lockdown measures in July after fresh outbreaks of the more transmissible Omicron variant were found. On Friday, China reported more than 2,000 local Covid-19 cases as infections in the southern Hainan island edged higher with mass testing and several lockdowns resulting. Japan’s preliminary GDP for 2Q 2022 came in at 2.2% YoY, better than the 0.1% reading for the prior quarter but below the expected 2.5% figure. On a QoQ basis, the preliminary reading was 0.5%, up from 0.0% in 1Q 2022 but again below the expected figure of 0.6%. Wholesale prices in Germany increased by 19.5% YoY in July of 2022 following the 21.2% gain the prior month. Compared with the previous month, wholesale prices fell 0.4% in July, the first decline since October 2020. Domestic Economy At 8:30 AM ET, we’ll get the NY Empire Manufacturing Index data for August and the headline reading is projected to fall to 5.5 from July’s 11.1 reading. AT 10 AM ET, the NAHB Housing Market Index for August will be published, and the consensus view has it unchanged MoM at 55. The U.S. House of Representatives voted 220 to 207 along party lines on Friday to pass the Inflation Reduction Act, paving the way for wide-ranging reforms in healthcare and clean energy. President Biden is expected to sign the bill into law. Data from AAA put the national average gas price at $3.959 over the weekend, but Goldman Sachs (GS) sees the price surging back to $5 by the end of the year with Brent crude returning to $130 a barrel as the market still needs to balance rising demand and tight supplies. Following last week’s inflation data, markets see a 50% chance the Fed will hike by 75 basis points in September and that rates will rise to around 3.50-3.75% by the end of the year. Meanwhile, the bond market continues to question if the Fed can deliver a soft landing, with the yield curve remaining deeply inverted. Markets Markets closed the week on a strong note with Friday seeing almost all sectors up over 1.00% and Consumer Discretionary names well over 2.00%. The Dow rose 1.37%, the S&P 500 advanced 1.73% and both the Nasdaq Composite and the Russell 2000 posted a 2.09% gain on the day. In reviewing top contributors to returns across the sectors, Apple (AAPL) and Microsoft (MSFT) combined to account for about 48% of Technology sector returns, while Tesla (TSLA) managed to do that all on its own for the Consumer Discretionary sector. Here’s how the major market indicators stack up year-to-date: Dow Jones Industrial Average: -7.09% S&P 500: -10.20% Nasdaq Composite: -16.60% Russell 2000: -10.19% Bitcoin (BTC-USD): -48.93% Ether (ETH-USD): -48.19% Stocks to Watch Before trading kicks off for U.S.-listed equities, Clear Secure (YOU), Li Auto (LI), Tufin Software (TUFN), and Weber (WEBR) will be among the companies issuing their latest quarterly results and guidance. Bloomberg reports Wells Fargo (WFC) is looking to shrink its once dominant mortgage business. Shares of PlayAGS (AGS) jumped in after-hours trading on Friday after confirming Inspired Entertainment (INSE) made a $10 per share offer for the slot machine maker. IPOs GigaCloud Technology (GCT) and Innovative Eyewear (LUCY) could price their respective IPOs this week. Readers looking to dig more into the upcoming IPO calendar should visit Nasdaq’s Latest & Upcoming IPOs page. After Today’s Market Close Fabrinet (FN), Global-E Online (GLBE), Navitas Semiconductor (NVTS), World Wrestling (WWE), and ZipRecruiter (ZIP) are expected to report their quarterly results after equities stop trading today. Those looking for more on which companies are reporting when, head on over to Nasdaq’s Earnings Calendar. On the Horizon Tuesday, August 16 UK: Employment Change, Average Hourly Earnings – June Germany: ZEW Current Conditions & Economic Sentiment – August Eurozone: ZEW Economic Sentiment – August US: Housing Starts & Building Permits – July US: Industrial Production & Capacity Utilization – July Wednesday, August 17 Japan: Core Machinery Orders – June Japan: Imports/Exports – July UK: CPI, PPI – July Eurozone: 2Q 2022 GDP US: Weekly MBA Mortgage Applications US: Retail Sales – July US: Business Inventories – June US: Weekly EIA Crude Oil Inventories US: Federal Reserve FOMC Meeting Minutes - July Thursday, August 18 Eurozone: CPI - July US: Weekly Initial & Continuing Jobless Claims US: Philadelphia Fed Index – August US: Existing Home Sales – July US: Weekly EIA Natural Gas Inventories Friday, August 19 Japan: CPI – July UK: Retail Sales – July Germany: PPI - July Thought for the Day “People who avoid failure also avoid success.” ~ Derrick Lewis Disclosures Tufin Software (TUFN) is a constituent of the Foxberry Tematica Research Cybersecurity & Data Privacy Index Tesla (TSLA), Li Auto (LI) are constituents of the Tematica BITA Cleaner Living Index Tesla (TSLA), Li Auto (LI) are constituents of the Tematica BITA Cleaner Living Sustainability Screened Index Apple (AAPL), Microsoft (MSFT) are constituents of the Tematica Research Thematic Dividend All-Stars Index The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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