The price of Ethereum has doubled from $1,800 last July to $3,500 today.

Throughout this newsletter, I have been preaching to readers that price appreciation will be higher in Ether than it is in Bitcoin.

Ethereum simply has better technology and is a better bet in the long run and sadly for Bitcoin, they are further along in their maturation cycle therefore the explosive up moves are confined by the law of large numbers.

It was simply almost a given that Ethereum would go from $1,000 to $3,500 and it’s really only a matter of time until they break $5,000 and then $10,000.

This is the second most popular cryptocurrency and although not a great store of value yet like Bitcoin, its fan base is growing by the day.

Here are a few answers for Ether fanatics from typical Ether questions.

Crypto investors always need more fine-tuning and know-how about cryptocurrency.

ETH is a great buy-the-dip opportunity for crypto diehards, and I believe there is clear sailing until $10,000.

Frequently Asked Ethereum Questions

Where's the best place to buy ETH?

There are many centralized exchanges that support Ethereum. If you live in the US, the most frequented exchanges are Coinbase, Gemini, and Kraken. Coinbase users can use Coinbase Pro for lower fees.

When is Eth2 launching?

Eth2 is a marketing term used to represent a number of updates to Ethereum. The Eth2 proof-of-stake chain was first launched in December 2020. "The Merge", which is the event that will fully switch Ethereum's consensus to proof-of-stake, is estimated to be ready in early 2022, although there is no exact timeline. Other updates, such as data shards, will follow that update.

Do I need to do anything to update to Eth2? Will Eth2 create a new token?

No, ETH holders never need to take any action to keep holding ETH. Ethereum users will be unaffected by the Eth2 upgrade. And the Eth2 updates will not create any new tokens.

How can I stake my ETH?

There are two ways that you can stake your ETH: by either running your own validator or providing your ETH to a staking pool.

Running your own validator requires a modern computer and 32 ETH.

Staking pools accept any amount of ETH. I recommend Lido or StakeWise.

Why are Ethereum transaction fees so high?

Like most blockchains, Ethereum fees are determined by supply and demand. The large demand to use Ethereum has pushed transaction fees quite high (however, fees were just a few cents only 2 years ago). Fees are especially high during market volatility, and during NFT drops.

What is being done to lower Ethereum transaction fees?

Ethereum fees are reduced by using layer-2 rollups. Rollups are scaling solutions that allow for significantly cheaper transactions, while still maintaining Ethereum's security.

Additionally, Eth2's data shards will make rollups even cheaper.

While rollups are cutting-edge technology being actively developed, a number of them are already live on the Ethereum mainnet.

What's the best wallet for Ethereum?

The most popular tool for using decentralized applications is Metamask. However, for security reasons, I recommend using a hardware wallet such as a Trezor or Ledger.

Sell Bitcoin (BTC) when it rallies.

The goalposts have narrowed lately for the digital gold and investors need to trade the market we have, not the market we want.

Even for long term, the crypto bull case is alive and kicking. In the short term, the flight to safety trade has shown that bitcoin is yet the safety asset believers want you to think it is.

Cash or treasuries are better options even with inflation running a hot 7.5%.

An ominous sign of late was when the co-founder of the Ethereum (ETH) blockchain Vitalik Buterin told us the digital-asset universe may actually benefit from a selloff in coin prices.

That’s bad news for prices if he says that.

“The people who are deep into crypto, and especially building things, a lot of them welcome a bear market,” Buterin said during an interview with Bloomberg.

“They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does — it does obviously make a lot of people happy — but it does also tend to invite a lot of very short-term speculative attention.”

I don’t agree with his statement and it’s an engineer talking about something important but at a technical level.

Investors don’t care what happens at that technical level in the short term.

Although there will always be speculators in every asset class, there is room for all sorts of investors long and short.

The speculators add liquidity to the market in an asset class where many coin creators are begging for more adoption.

For Buterin, to make this selloff about speculators is somewhat arrogant.

The truth is that he should be cheerleading anyone and everyone to get into crypto no matter where the funds come from.

On a micro level, Buterin should be more worried about competing against Bitcoin which is a tough ask.

Unfortunately, crypto has performed poorly against the flight to safety bid when a cornerstone premise had it that bitcoin and crypto were supposed to be part of that safety trade.

The currency is not mature enough and the weakness in prices tell the whole story.

Some highly publicized crypto hacks haven’t helped the case of the normal guy putting money into crypto either.

It continues to be a selective niche industry where it’s a hassle to go from fiat to crypto exchange and many can’t figure out the tax reporting rules.

Buterin has shifted his focus to scaling Ethereum in recent years. The popular blockchain has long suffered criticism because transactions on Ethereum can be slow and expensive.

Buterin should just worry about his own digital currency lasting the test of time instead of thinking he can pick and choose what type of investors goes into crypto.

Investors dumped Bitcoin after Russian President Vladimir Putin ordered troops into Ukraine.

Therefore, expect any geopolitical flareups to include huge bitcoin selloffs and a flight to the US dollar.

Any kinetic war means another leg down in bitcoin.

Volatility will play a huge role in the next move in bitcoin.

If there is a moderate solution to the Eastern European military hostility, then expect Bitcoin to jump back into the $40,000 area while an acceleration of aggressiveness will be met with a selloff down to $30,000.

So yes, guys like Buterin aren’t building the quality that needs to be built.

Clearly, they have been penalized and boxed up as if digital crypto is of inferior value to a normal equity stock.

The trust in the asset is not broad-based and it lends to the theory that readers shouldn’t double down in any crypto-related asset, but inch in and go from there.

Crypto has also performed poorly with rapidly advancing interest yields which is also worrying for readers looking for asset appreciation.

If bitcoin bounces back to over $40,000, I will sell that rally.

Most people here invest only in crypto, because they are already extremely successful or on a similar path and crypto, being an appreciating and depreciating asset, is a means to diversify a portfolio between many different types of investments.

In the unlikely event that a reader is scrounging up their last few dollars to bet on the next speculative crypto big thing, then I would say your prospects are dim.

The unfair narrative of crypto loosely follows one of a fly-by-night operation in which someone can get rich in one day.

That is a complete fallacy.

And sure, I am not saying that getting rich in one day has never happened before, it certainly has, and it will time and time again.

But the odds of that happening are miniscule in cryptocurrency.

Even if someone who could be classified as middle class in the U.S. is now being advised to add crypto, the smart only put a small portion of their savings into it.

High net worth people often say they don’t need to get rich twice in their life.

Allocating small portions complements the diversity in one’s personal finance between crypto, precious metals, 401k or IRA, savings, stocks, and real estate.

This is the base case from which I analyze crypto prices and I am not assuming readers are putting 100% of their net wealth into some altcoin even if they are free to do so.

And when talked about through the prism of just another asset that is part of a bigger portfolio, then crypto and its existence is completely justified and important.  

I mean honestly, it is surprising that it took until 2012 to create it, and it’s been a long time coming for the world to have something more advanced than the paper dollar.

I would argue that we are years late on this one and crypto should have been created in conjunction with the internet and computers.

To think it took this long to figure out a digital money that defies international borders and regulation makes me believe that innovation isn’t as fast as it needs to be in the digital ecosystem.

Much of the mainstream media appears to cater towards the delusional retail trader urging people who have $200, $1000, or even $10000 to buy crypto at any price.  

Participating in stocks is still attractive to the average person, but the issue here as it relates to its value versus crypto, stocks are unattractive in a rising interest rate environment where the Fed has promised to curtail its balance sheet purchases.

Crypto is just another asset where the price is determined by supply and demand, it is not a magic bullet.

Even though fiscal policy isn’t accommodating in the short-term to crypto price appreciation, crypto will benefit long term as a hedge to inflation which the government has allowed to spiral out of control.

The priority right now for money is the safety of it and that won’t always be the case especially if the pace of rate hikes becomes orderly and manageable so much so that investors feel comfortable putting new money to work in high volatility assets. 

So if crypto is the Hail Mary investment that will drag you out of a life of mediocrity then I would say you are poorly informed.

Investors need to treat it without emotion, a price that is set by supply, demand, and a series of evolving external factors.

This is the right way to go about it in order to absorb those massive 10% drawdowns when you’re sleeping at night.

You should be able to sleep at night with a 5% crypto allocation, maybe even up to 10%.

Diversification is for the investors who have accrued some modicum of partial success and want to keep their portfolios more stable.

Remember this is not a sprint, but a marathon.

At the beginning of your journey diversification is more of a problem than real help. Try to learn more about crypto and being an above-average crypto investor will be better than being an average investor in a few different types of investments.