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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Why Ethereum, Polkadot, and Harmony Are Soaring Higher This Weekend

What happened This week has been a rather historic one, with the Russian invasion of Ukraine putting investors on edge. This invasion has impacts that span far beyond financial markets. However, looking at how cryptocurrencies reacted to this news, this asset class is clearly one that investors don't feel comfortable holding through times of high uncertainty. That said, Ethereum (CRYPTO: ETH) and two layer-2 Ethereum scaling networks Polkadot (CRYPTO: DOT) and Harmony (CRYPTO: ONE) have made up most, if not all, of the ground lost this week on the invasion news. Investors seem to be pricing in the potential for talks between Russia and Ukraine to commence, which may signal an end to the fighting, and therefore an end to this market uncertainty. Accordingly, Ethereum and Polkadot have actually turned green over the past seven days, with Polkadot down less than 5% over this period. That's a remarkable comeback for these top tokens. As of 10 a.m. ET on Saturday, Ethereum, Polkadot, and Harmony had gained 3.6%, 12.2%, and 14.8%, respectively, over the past 24 hours. This move is a strong continuation of strength seen during previous trading sessions, as investors appear to be turning more optimistic about the crypto sector as a whole. Ethereum also got a boost on Thursday when the network announced its scaling testnet zkEVM has been launched. This testnet aims to tackle some of the scaling issues that have plagued the Ethereum network of late. Polkadot and Harmony, layer-2 scaling solutions, weren't phased by this announcement, with investors seemingly betting on continued growth in the realm of decentralized finance pushing forward the need for additional scaling solutions over the long term. So what This geopolitical environment is one that has certainly provided for outsized volatility in many markets. For cryptocurrencies, which are already inherently volatile, this has meant a much more exciting (if you can call it that) rollercoaster ride for investors. This week's events signal just how crypto investors need to accept volatility, particularly in uncertain times like these. This Ethereum testnet news is a big deal, in how the entire Ethereum ecosystem may be reshaped moving forward. As Ethereum moves toward the completion of its upgrades that would bring Ethereum 2.0 to the world, how this will reshape the existing need for scaling solutions remains unclear. That said, it appears investors are taking the view that Polkadot and Harmony both provide utility, and will likely continue to play a role in helping scale the Ethereum network, even after Ethereum is fully upgraded to a sharding-capable network. Now what Ethereum, Polkadot, and Harmony provide the kind of intra-day volatility that make most stomachs churn. Zooming out, these tokens haven't moved much over the past seven days. Accordingly, those taking the long-term view of these tokens, choosing to do nothing, have been rewarded. However, this intra-day volatility is something to keep in mind, as the market recalibrates its expectations for these networks moving forward. Personally, I expected this Ethereum testnet news to drive underperformance with Polkadot and Harmony, something that didn't take place. Accordingly, these three tokens are ones I will be watching closely from here. 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 January 20, 2022 Chris MacDonald owns Ethereum. The Motley Fool owns and recommends 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. Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

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