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I Bought a Lot of Ethereum This Year. Here’s Why It Made Me Tons of Money.

by | Apr 25, 2022 | Money

“Ethereum makes no sense. It’ll go to zero.”

That’s a common misconception about the second-largest cryptocurrency in the world. Ryan Sean Adams from the Bankless podcast finally made me understand why:

The most bullish thing for Ethereum is to be understood.

When people don’t understand something, huge profits can be made. This is just one of the reasons I bought loads of Ethereum this year.

It makes sense why people don’t understand one of the biggest investment opportunities of this century

Wait, what?

Yep, it makes complete sense. In less than 90 days Ethereum undergoes another major upgrade. Most people have missed the news, or the technicalities are too complex for them to understand.

Let me oversimplify.

Scarcity creates value. That’s why Bitcoin became world-famous.

There are only ever going to be 21 million Bitcoins. As the use case becomes more popular, people will use Bitcoin like gold or a savings account. Out of the 21 million Bitcoins, only 19 million have got released so far.

The remaining 2 million get released slowly over the upcoming decades. This additional supply is called the inflation rate. For Bitcoin, it’s extremely low.

Very soon Ethereum is going down this path … except better.

In less than 90 days the inflation rate (number of Ethereum coins created) will reduce by 90%.

Every time a transaction happens on Ethereum, the coins used in the transaction will be burned and disappear. In monetary terms this is called deflation. Or a reduction in the supply of Ethereum.

This means the supply of Ethereum won’t just get capped like Bitcoin. No. The new supply of Ethereum will reduce by 90% and the overall supply will decrease over time.

So this makes Ethereum in some ways better than Bitcoin.

By the way, this is only when we think of Ethereum’s monetary features. It forgets the fact it’s a massive ledger that supports smart contracts, enables decentralized finance, is the application layer of Web3, and created the NFT boom.

Scarce digital assets have AND will continue to make owners crazy financial gains in the future. The reason is that the current scarce assets — gold, real estate, stocks — have major flaws that make them out of reach for a lot of people, or simply ineffective.

Assets are how we store the time we give up to go to work.

New time storage assets are needed.

I started buying Ethereum at $150. It’s now over $3000. When the supply starts to go down in less than 90 days, more money will be made.

You can’t escape the vortex of Ethereum

We wouldn’t have NFTs or the Metaverse if it wasn’t for Ethereum.

Decentralized finance took off a few years back, although t’s slowed down recently. NFTs took off in the last year. They will slow down too as the hype peaks and the bubble of speculation bursts.

The metaverse is the next to take off.

Ethereum’s infrastructure will fuel that boom too. Then crypto gaming will likely be the next boom after that. Everywhere you look, all the new booms on the internet are silently enabled by Ethereum.

Most just don’t know.

Ethereum isn’t the only platform at the foundation of this new world. There are others. What most don’t realize is Ethereum has the balance of decentralization (to enable trust) and security, exactly right.

The developers prefer to build on Ethereum too. It’s why the upgrade in less than 90 days can happen so fast.

Watch where the developers go to build. Follow them quietly.

“Invest your money where the smartest people invest their time”

(Sahil Lavingia)

Years ago the best talent came out of Silicon Valley. Now all the best startups, ideas, and execution comes from blockchain-enabled Web3 technology.

This is no accident.

The blockchain tech stack is just better. It’s mostly open-source, easy to build on, has crazy levels of automation, and isn’t limited by country borders.

I invest in Ethereum to be the dumbest person in the virtual room of the future. Investing in smart people is a life hack.

The rollercoaster ride of crypto prices

The Ethereum price has been up and down like a yoyo.

This scares away many people. Not me. Volatility is needed for explosive growth. You can’t have one without the other.

When crypto prices tanked this year, I bought Ethereum at bargain prices. It’s not an accident either. I don’t have blind faith in case that’s what you’re thinking.

I’ve done my 1000 hours of research since the early days of Ethereum. I have conviction because my in-depth research enables it.

I’m not guessing or betting. The future of the Web is stupidly obvious. It just takes enough hours to see the problems and understand how blockchain solves them.

When you understand, the self-talk becomes “this is freaking inevitable.”

Owning Ethereum creates passive income

There’s that dirty phrase again: “Passive income.”

In the last year I’ve invested my Ethereum at 6.6%. Every month I get paid this interest for doing nothing. This can make you a lot of money if left for long enough to allow the magic of compounding to take over.

Thinking long term

Ethereum only makes you a lot of money if you think long-term.

That’s the harsh truth. I apply a minimum of a 5-year time horizon to every investment I make.

My price prediction for Ethereum once the next upgrade happens is at least $10,000 in the next few years.

Ethereum isn’t a worthless token you hold that performs no valuable function — unlike the random dog coins far too many people buy.

Ethereum is a business.

  • It has cashflows.
  • It makes a profit.
  • People pay to use the network.

Financial gurus with MBAs who are far smarter than me have done the numbers. One of them is Ryan Allis, and his calculations are impressive. There’s no witchcraft involved at all.

All Ryan did was apply basic investing and business fundamentals to Ethereum, which no one had done before.

When you think long-term and understand Ethereum’s discounted cash flow, my price prediction of $10K seems low. I’ll let you be the judge.

Opportunities are attracted to those who understand

That’s the final way Ethereum is making me money.

It’s uncommon to understand this stuff. When you do, opportunities effortlessly come your way with zero work. Those opportunities for me have turned into cold hard cash.

Learn a skill that’ll be valuable in the future. Your future self will thank you.

Closing Thought

Many of you have heard of ETFs also known as Index Funds. The S&P 500 is an index of the top 500 companies in America. When you invest in an S&P 500 index fund, you own a small piece of all the top companies in the US.

This idea applies to crypto too.

When you own Ethereum it’s the ETF or Index fund for internet culture. It’s also the index fund for many of the big opportunities still to go mainstream in tech such as NFTs, the metaverse, Defi, and smart contracts.

Owning Ethereum is owning a piece of the next iteration of the internet. That can make you a lot of money if you think long-term.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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