Ethereum drops by over 60%. Is it still worth investing?

After a phenomenal year in 2021, Ethereum has had some tough months. Since its peak in November, its price has dropped more than 60% to around $ 1.800 per token.

To be sure, it's not just Ethereum facing extreme volatility. The entire cryptocurrency market is in crisis, having lost more than $ 1.000 trillion in recent months. But if you have already invested or are considering investing in Ethereum, this decline could be worrying.

Should you still invest in Ethereum right now? Or is it better to wait? It depends on a few factors.

Will Ethereum Recover From This Downturn?

Like all cryptocurrencies, Ethereum is still speculative right now. No one knows for sure how he will behave in the long run, which makes it difficult to say when or if he will recover. There is also the possibility that cryptocurrencies, in general, will not be successful over time, which makes all cryptocurrencies risky investments.

That said, Ethereum is one of the strongest cryptocurrencies around. Its blockchain network is most used for decentralized applications (dApps), such as non-fungible token markets (NFT) and decentralized finance projects (DeFi).

The developers are also working on launching an update to make Ethereum faster and more convenient for users. Once the update is complete (which is currently scheduled for 2023), this could give the cryptocurrency a big advantage over the competition. And the more benefits a cryptocurrency has, the more likely it is to be successful over time.

Also, keep in mind that cryptocurrencies are still in their infancy. Extreme volatility is relatively normal for the sector, so a sharp decline is not necessarily a cause for panic. Even if there are never any guarantees in investments, Ethereum is likely to make it through this slump.

Is it still worth investing right now?

Whether or not to invest in Ethereum (or any other cryptocurrency) will largely depend on your risk tolerance. Despite its advantages, Ethereum is still a risky investment. There are no guarantees that it will have positive returns over time, and if it fails, you could lose all the money invested.

Even if successful, extreme volatility is likely to occur over time. The cryptocurrency market may face further regulatory hurdles in the future, and any potential snags in Ethereum's upgrade could result in increased volatility.

It is also not the first time that Ethereum has experienced a severe downturn. In 2018, the cryptocurrency lost almost 95% of its value over the course of the year. Although it has recovered from that crash, it is further proof that Ethereum is no stranger to volatility.

Of course, there is also the possibility that Ethereum will be a profitable investment in the long run, capable of making you a lot of money. If you are willing to take on higher levels of risk for a chance to earn these kinds of rewards, this could be a smart time to invest as cryptocurrency prices are at their lows.

Finally, consider your overall financial situation before investing. As all cryptocurrencies are still speculative, invest only as much money as you are able to lose. While there is nothing wrong with being optimistic about Ethereum's future, it is important to consider worst-case scenarios as well.

Ethereum is one of the strongest cryptocurrencies, which means it has a better chance of bouncing back from this downturn. However, it still comes with a lot of risks, so it's important to think carefully before investing. However, if you are willing to take a more volatile investment, it might be a smart option for you.