How to buy ethereum in Canada
Is ethereum a good investment in 2021?
The broadening of ethereum’s functionality, social media buzz and flashy newspaper headlines have intensified interest in ethereum. The resultant FOMO-fuelled buying frenzy has sent ether skyrocketing 215%, more than tripling its prices, this year alone, as of June 18, 2021.
Some crypto watchers liken the explosion in ether’s popularity to the rise of the internet in the 1990s. “This is like investing in actual infrastructure of a New Age, decentralized Internet,” says Christopher Matta, president of 3iQ Digital Assets (US), Canada’s largest digital asset fund manager.
However, rather than obsess over its price movements, investors should focus on what ethereum can help build and problems the technology can solve. Think like a venture capitalist who’s looking at a “highly volatile product with huge potential rewards, but also huge amount of risk,” Matta says.
Experts counsel against any speculative, get-rich-quick play. Only the “investor who has a long-term time horizon and who can stomach severe volatility should seriously consider adding ether to their portfolios in 2021,” Zagari advises.
The recent stock market volatility has pushed more investors towards ether, which has emerged as an asset class that can provide uncorrelated returns compared to traditional instruments. Although, things could just as easily go pear-shaped if you try to play the momentum game.
Ether could offer an attractive risk/reward outcome, only “if you can buy and hold, and stretch out its extreme volatility risk over many years,” Zagari contends.
If you want to dip your toe into ether, start with a 5% allocation, says Matta. “You’re concentrating an investment in potentially a cutting-edge technology, [but one] that has only been around six years, and it’s still not fully proven,” he cautions.
Over the past year, ether has rung up nearly 1000% return, as of June 18, 2021—a phenomenon that Matta says, “illustrates the asymmetric risk profile of ether.”