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Time to accumulate ETH? ?3

22:12 09-Oct-22


A few weeks ago a long time friend and confidant texted me to ask, “is it safe to buy ETH?” The merge had just happened on 9/15 and price action was experiencing a nice pull back. Smart money had dry powder waiting on the sideline for a great entry point just like this. But was the “sell the news” event of the merge going to mark the bottom? Wanting to look smart, I cautioned against purchasing that day. The FOMC rate hike was due up in just a few days, and in my estimation this would push the price down further.

On the day of the meeting, price action first pumped over 3% (eegads was I wrong??) before dumping a whopping 12% down to monthly lows around the 1,200USD level. Victory text messages were happily exchanged as the good news of buy orders being filled was shared. But temporary euphoria gave way to an always present worry; what if we take another leg down on future macro news or circumstance? Is it really safe to buy ETH? Is it still a good buy at current levels?

Well, there is plenty more painful news coming down the pipe: - More rate hikes this year. - More inflation numbers which will likely get worse before they get better even if the fed action is successful. - More dollar strength as DXY continues its climb.

However, despite all of the fear currently gripping the markets, I do think we are trading in a relatively safe range to get an entry or accumulate Ethereum as well as a few of the other more robust blockchain projects.

Ethereum is incredibly powerful with transactional capability rivaling or surpassing traditional financial networks. For those of you in the know, this is hardly novel news, but, for the average 401(k) style investor it can be hard to parse what is really going on here. The recent "merge" was an incredibly risky maneuver and the fact that the developers pulled it off is quite the feat. Now that we are on the other side, with no evident hiccups along the way, it is possible to take a deep dive look at post merge performance statistics and on-chain data.

It’s also important to frame the digital asset in its proper context and compare it to other so-called “blue chips” of the crypto world. Ethereum is one of several successful “layer one” blockchains, meaning they have their own network. Other layer ones include: Bitcoin BTC, Binance Coin BNB, Cardona ADA, Polkadot DOT, and Litecoin LTC. To me, the crypto space has a lot of parallels with the dot com boom. Not all of these layer ones will be winners. But, almost certainly, one or more of these networks is due for explosive growth and adoption as the blockchain technology disrupts current legacy systems.

The downward macro market pressures are formidable and will continue suppressing price levels for some time. However, if you can stomach the volatility of the crypto markets, this should be a good time to start or grow a position in ETH and/or some of the other strong networks. We have laid some groundwork here and framed our objective; to correctly identify the winners of the blockchain technological race. Our next piece will be a closer look at ETH and its stats and capabilities compared to other blockchain and legacy networks. We can move on in subsequent articles to review the other layer one options as well as select layer twos that show particular promise.