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I invest a little “play money” in cryptocurrencies. And 2024 has been a great year for them.

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In fact, I occasionally share the story about how I tried to invest in Bitcoin when it was worth under $1,000 a coin, but I couldn’t get the transfer to the cryptocurrency exchange. Eventually, I gave up — and lived to regret it in the years to come.

Along those lines, how would you have fared if you’d gotten in on Ethereum in its early days? How much would you have today if you’d invested $1,000 at the launch of the second-most popular cryptocurrency?

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Ethereum, Then and Now

In July 2014, Ethereum held an initial coin offering (ICO), raising money for the project through Bitcoin. It worked like a crowdfunding project, where investors bought in (paying with Bitcoin) for early access.

A year later, the actual Ether blockchain coins (ETH) started trading live at $0.31 per coin.

As of mid-April 2024, ETH trades at $3,157 per coin. That marks a roughly 10,000% increase in value.

If you had invested $1,000 at $0.31 per coin, you’d have owned 3,225.81 ETH coins. At today’s pricing, that would be worth $10,183,871.

Today’s pricing doesn’t even represent Ether’s peak. On November 9, 2021, ETH reached a dizzying $4,815. If you had cashed out your ETH coins at its zenith, you’d have walked away with a cool $15,532,258.

Crypto Halving

Because cryptocurrencies exist in ones and zeroes, rather than, say, physical gold and all the supply limitations attached to it, crypto creators must build in some type of scarcity.

For Bitcoin, that means halving the coins paid to miners for each block on a schedule of every 210,000 blocks. In fact, the next halving will likely have happened by the time this article publishes in mid-April.

Like Bitcoin, Ether must add scarcity and limit production over time. But unlike Bitcoin, it does so with far more complexity. It does so through a “triple halving” process including: fee burning, staking, and token issuance rate reduction. Read up on the Ether triple halving process for all the nerdy details.

That happens continuously, unlike the much-hyped halving events for Bitcoin. It produces the same result though: slowing new supply entering the market, to drive up values.

Speculation vs. Investing

I opened by claiming that I “invest” a little money in cryptocurrencies. The simple truth, however, is that I consider it speculating, not investing.

What’s the difference?

Investments have intrinsic value. That value could come from its use, such as a home. Or it could come from revenue, in the case of a business or an apartment building. You can measure the investment’s value based on that revenue, or based on comparable assets in the same market.

Cryptocurrencies don’t produce revenue and have no tangible use. They’re only worth wherever someone else is willing to pay for them, similar to collectibles like baseball cards or, dare I say it, non-fungible tokens (NFTs). To me, that makes them speculative.

Is there an inherent value in a decentralized currency? I imagine so — but I have no idea what it might be, because there’s nothing concrete to measure.

By all means, play around with money you can afford to lose in speculative assets like cryptocurrencies. Just don’t bet the farm on something that produces no revenue or measurable value.

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This article originally appeared on Here’s How Much a $1,000 Crypto Investment in Ethereum at Its Launch Would Be Worth Now


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