Is Ethereum a Good Investment

Crypto Robot

Is Ethereum a good investment in 2025—or has the opportunity already passed? With ETH powering DeFi, NFTs, and smart contracts, it’s one of the most critical projects in the crypto ecosystem. But with increasing competition from Solana, Cardano, and other blockchains, investors are asking: is Ethereum still worth buying today?  In this video, we break down Ethereum’s fundamentals, from ETH 2.0 staking and EIP upgrades to adoption in DeFi and institutional flows. We’ll explore Ethereum’s strengths, risks, and growth potential compared to Bitcoin and other altcoins. By the end, you’ll know whether Ethereum is a good investment, a safe long-term hold, or an overhyped bet in 2025.  👉 Subscribe for daily alpha on crypto market trends, bold Bitcoin predictions, and altcoin gems that could 10x your portfolio! – https://www.youtube.com/channel/UCpjN8bNE-CoAgpfMatghM9g  📧 Email: cryptorobothelp@gmail.com  💰 Affiliate Links  Sofi Checking & Savings – Get $25 free ➝ https://www.sofi.com/invite/money?gcp=16a53d0f-b4b2-441d-9100-cfb506305260&isAliasGcp=false  Sofi Investing – Free $25 in stock ➝ https://www.sofi.com/invite/invest?gcp=ab31edd8-701e-4109-9225-51b41e35d246&isAliasGcp=false  Coinbase Exchange – Earn up to $300 BTC ➝ https://coinbase.com/join/YPUQLCY?src=referral-link  Tracking Tools – CoinGecko | CoinMarketCap  Trading Tools – Get $15 off TradingView ➝ https://www.tradingview.com/pricing/?share_your_love=cryptonextsteps  #Ethereum #ETH #Crypto #CryptoNews #Altcoins #DeFi #Web3 #BitcoinVsEthereum #CryptoInvesting #EthereumPrice #ETH2 #Blockchain #CryptoMarket #EthereumFuture #Investing

Transcript

00:00welcome back to the deep dive today we are digging into a really big question looking at a stack of

00:11sources trying to figure out the real investment case for ethereum yeah it's fundamental isn't it

00:15we're asking is eth you know a sustainable long-term hold something foundational or is it

00:21still maybe more of a high-risk play that just kind of rides the bull markets and that difference

00:26well it's critical for you listening yeah because our sources today we've got everything from

00:30official ethereum notes vitalik buterin's blog posts uh right down to on-chain data from glass

00:37node massari a real mix a real mix and they all push us to look past just the price ticker

00:43ethereum isn't just trying to be digital money it's designed really as this base layer this

00:47backbone for defy nfts smart contracts so our goal here is to pull out the main arguments from these

00:53sources look hard at the economics like that deflationary stuff weigh up the institutional

00:58interest against you know the real risks competition regulation definitely we're synthesizing here not

01:05giving financial advice we want to give you a clear picture of what the research stack says about

01:10ethereum's fundamentals and where it sits in the market okay so where do we start to understand the

01:17investment case we first need to get what makes ethereum well ethereum different from bitcoin exactly

01:24why does it even exist it starts with its unique value prop bitcoin was about digital scarcity right

01:31digital gold ethereum brought us the smart contract and that that technology is really the spark for

01:37pretty much all of web3 programmable money that's the key concept explain that a bit more what's a smart

01:42contract really well think of it like self-executing code it automatically enforces an agreement when

01:48certain conditions are met no need for a middleman like a lawyer or a bank so if x happens then the

01:53contract automatically does y precisely and it's written onto the blockchain so it's immutable transparent

01:58now the crucial bit is this turns eth the token into a utility you actually need if they call it gas

02:04to pay for the computation that makes these contracts run okay so the token isn't just for speculating

02:09it's fuel for the network exactly and this utility this programmability is what let ethereum basically

02:16become the home for two massive ecosystems you mentioned defy decentralized finance and nfts non-fungible

02:24tokens the sources are pretty clear most of the big innovations in those areas they started on ethereum

02:30huge first mover advantage massive but you know to keep that lead and actually handle potentially global

02:36scale the network itself had to evolve and the sources really zero in on two massive upgrades the first one

02:43everyone's heard of it the merge right the big shift away from proof of work that energy guzzling system

02:48bitcoin uses proof of stake or pos now the environmental angle got all the headlines which is fair enough

02:54huge reduction in energy use yeah but the economic shift from an investment standpoint was just as profound

03:00maybe more so how so what changed fundamentally with pos well the whole security model flipped

03:05instead of miners spending electricity you have validators staking their own eth locking it up as

03:10collateral so their own money is on the line their own money if they try to cheat the network

03:15their staked eth gets slashed basically penalized it creates this really strong economic incentive to act

03:23honestly and critically the merge slashed forgive the pun the issuance of new eth by something like 90

03:3290 reduction in new supply wow yeah it dramatically slowed down the inflation rate and that sets up the

03:39whole ultrasound money thing we need to get into later okay so the merge addressed security energy and

03:45inflation but it didn't fix the network's biggest headache right scalability things still get slow and

03:50expensive exactly which brings us to the next big upgrade the sources focus on dank charting sounds

03:56super technical i know yeah break that down for us okay so jank charting is ethereum's long-term plan

04:00for scaling but it's different from how some competitors try to scale they often go for a

04:05monolithic approach try to make one single chain do everything faster theorem is doing something

04:09different yes it's modular dank charting isn't about making the main ethereum chain itself process everyday

04:17transactions super fast instead it's specifically designed to make things way cheaper and easier

04:22for layer 2 scaling solutions you know roll-ups like arbitrum optimism right the l2s that bundle

04:28transactions off chain how does dank charting help them it introduces something called blobs think of them as

04:34big cheap chunks of data space specifically reserved for these roll-ups right now when an l2 posts its

04:41compressed transaction data back to the main ethereum chain for security it has to compete for space with

04:46regular transactions and that gets expensive ah so blobs give them their own dedicated cheaper lane

04:52exactly a massive data lane so layer 2s can dump their data onto ethereum much more cheaply and that

04:58cost saving should in theory trickle down to you the end user making transactions on that l2 potentially

05:03dirt cheap okay so cheaper l2s mean ethereum can actually scale for potentially billions of users

05:09handling things like microtransactions gaming social media stuff that's just too expensive on the main

05:14chain now that's the vision the success of dank sharding is absolutely critical it's how ethereum

05:20plans to become that world computer people talk about without sacrificing its core security this

05:26technical stuff directly feeds the investment potential if it works mass adoption becomes feasible

05:32which leads us nicely into the bull case if the tech roadmap holds up what makes eth itself a

05:38compelling investment let's talk about that ultrasound money idea right ultrasound money it's a direct

05:43response almost a meme contrasting with bitcoin's sound money or digital gold narrative bitcoin's value

05:50proposition relies heavily on its fixed supply only 21 million ever anti-inflationary okay but ethereum

05:57doesn't have a fixed cap does it no it doesn't but thanks to a crucial change called eip 1559

06:03which went live back in august 2021 ethereum can actually become deflationary the supply can actively

06:08shrink over time eip 1559 that's the one that changed the transaction fees right how does that

06:13work again okay so before 1559 you basically bid in an auction to get your transaction included

06:18and all the fee went to the miners very unpredictable often expensive yeah i remember those days gas scores

06:24exactly eip 1559 split the fee now there's a base fee which the network sets automatically based on how busy

06:32it is and then there's an optional priority fee or tip you can add to jump the queue okay so where

06:38does the burning come in the base fee this is the magic part that base fee isn't paid to the validators

06:43the guys running the network now it's simply burned destroyed permanently removed from the total supply of

06:50you gone just like that poof gone only the small priority fee the tip goes to the validators as their incentive

06:57so wait if the network gets really busy like during a huge nft mint or some crazy defi action the base

07:03fee automatically goes up to manage congestion and if the base fee goes up more eth gets burned precisely

07:09and here's the kicker if the amount of eth being burned via this base fee is greater than the amount

07:14of new eth being issued to validators for staking the total supply actually goes down deflation bingo that's

07:21the ultrasound money thesis scarcity driven not just by a fixed cap but by the utility of the

07:27network the more people use ethereum the more eth gets burned the scarcer it potentially becomes

07:33the on-chain data shows this happening quite consistently during periods of high activity

07:38that's a powerful economic feedback loop utility drives scarcity it is and it's clearly not just

07:44retail speculators noticing this the sources really hammered the point about institutional adoption

07:50moving beyond just talk right this isn't just crypto native stuff anymore we're seeing big

07:55traditional players actually building on ethereum yeah this is a huge part of the bull case take visa

08:00for example the sources detail how they're actively experimenting with using ethereum specifically

08:06with stable coins like usdc running on ethereum for settling cross-border payments between their

08:11partners faster potentially cheaper settlement using the public ethereum blockchain for parts of their

08:16pilots yes it shows they see the potential of this public infrastructure and it's not just payments

08:22look at the banks jp morgan jp morgan's onyx division they're deep into experimenting with

08:27tokenization using private versions of ethereum tech but also interacting with public chains they're

08:33testing how to put real world assets like bonds maybe even internal money market funds onto blockchain rails

08:40for instant settlement so they see the smart contract capability as a better way to manage complex

08:46financial assets exactly it's recognition that this isn't just internet funny money it's potentially

08:52a new operating system for finance and all this real world experimentation this building

08:57it sort of pays the way for the next big potential catalyst ethereum etfs spot on following the

09:03bitcoin etf approvals the expectation according to these sources is very high for spot ethereum etfs

09:09maybe later this year or next and what would that mean practically it's huge an etf is a regulated

09:14familiar wrapper it allows massive pools of traditional capital think of pension funds endowments

09:20wealth managers who can't just buy eth directly on an exchange to get exposure easily through their

09:25brokerage accounts so it opens the floodgates for institutional money potentially yes it's not just

09:31about the inflow of cash though it's also about the signal it sends regulatory acceptance or at least

09:38tolerance it adds a layer of legitimacy positioning eth alongside bitcoin maybe even gold

09:44as a recognized investable asset for serious portfolios okay so we have the potential deflationary

09:49economics real institutional building and the prospect of etfs but there's another key strength

09:55the sources mention the ecosystem itself the developers the liquidity this is maybe ethereum's biggest

10:04stickiest advantage it's moat if you will when you look at the sheer number of active developers building

10:09on ethereum compared to any other layer one it's not even close thousands and thousands of developers

10:14yeah and along with that comes mature tooling libraries educational resources established

10:19standards like the erc20 token standard it's just easier and more efficient to build complex

10:23applications on ethereum right now and that attracts more developers which attracts more projects

10:27which attracts users and capital exactly it's that classic network effect it becomes self-reinforcing

10:33developers build where the users and the money are users go where the cool apps are capital

10:37follows the innovation it makes the ecosystem incredibly sticky it's hard and expensive for

10:45projects and liquidity to just pick up and move somewhere else that network effect is powerful and

10:51you know speaking of support and building things if you're finding this breakdown valuable hitting that

10:56like button subscribing maybe leaving a comment it really does help us it tells the algorithm people

11:00are interested and lets us keep doing these deep dives into the crypto space for you yeah it makes a

11:05difference so building on that network effect let's look back historically how did ethereum build this

11:12lead the sources point to some key moments defy summer is the big one right 2020 that felt like the

11:18cambrian explosion for decentralized finance it really was before that defy was niche defy summer showed it

11:24could be a real functioning alternative financial system all built on ethereum smart contracts what were

11:30some of the breakthrough projects from that era oh you had giants born then uniswap which pioneered the

11:36automated market maker or amm totally changed how token swapping worked no more order books for many pairs

11:42just liquidity pools game changing completely then you had lending protocols like ave and compound

11:49a ave introduced things like flash loans uncollateralized loans you had to repay in the same transaction block

11:55sounds crazy but it enabled all sorts of complex arbitrage and trading strategies these weren't

12:01simple apps they were complex financial machines running entirely on code and managing billions of

12:06dollars in value all launching and finding their footing on ethereum first and we can actually track

12:11that dominance with data right like total value locked tvl exactly tbl measures how much money is locked

12:17up in a specific protocol or blockchains defy ecosystem and while competitors definitely have periods of

12:23growth and height the charts consistently show ethereum holding the vast majority of the deep

12:28long-term capital in defy why is that why does the money stick there the sources argue it boils down

12:34to trust and lindy effect ethereum has been battle tested for longer its security model is perceived as

12:40more robust so if you're deploying serious capital billions of dollars you tend to favor the most secure

12:46most proven environment even if it's a bit slower or more expensive sometimes okay so defy established

12:53ethereum as the financial layer but then came the next wave which brought in a totally different

12:57crowd nfts in 2021 yeah the nft boom was massive for demonstrating ethereum's versatility it proved it

13:05wasn't just for finance nerds it could be the foundation for digital culture ownership identity and again

13:10ethereum was ground zero crypto punks board ape yacht club the icons these weren't just jpegs they became

13:18cultural status symbols digital identities access keys to communities and they launched and primarily

13:22traded on ethereum marketplaces like openc built on ethereum became dominant even when other chains

13:29offered cheaper minting or faster transactions for nfts the high value stuff the blue chips largely

13:35stayed on ethereum or its associated layer twos that's right it cemented ethereum's reputation as the

13:40high value chain the chain for assets that really matter whether financial or cultural it proved it could

13:47host these viral globally recognized applications so let's connect the dots for the investment case

13:52if ethereum keeps this dominance in both finance and culture what does that imply for the value of eth

13:58itself well the argument is straightforward if all this economic and cultural activity continues to

14:04happen on ethereum it drives persistent demand for eth as gas to pay for transactions it drives demand

14:11for eth to be staked to secure the network it reinforces the eip 1559 burn mechanism potentially

14:18making eth deflationary so past success fuels future demand which fuels the asset's value proposition

14:24through staking rewards and that deflationary pressure exactly and it also drives the adoption

14:29of layer twos because as the main chain gets more valuable and maybe more congested activity naturally

14:35moves to those cheaper faster layers that still rely on ethereum for final security it's a whole

14:40interconnected system okay that's a compelling bull case built on utility tech upgrades institutional interest

14:46and network effects but we absolutely have to look at the other side what are the major risks and

14:51concerns what could derail this number one without a doubt is still scalability and gas fees it's the

14:58recurring criticism the achilles heel as you called it earlier it really is despite the promise of l2s

15:05and dang sharding the user experience on ethereum mainnet can still be rough during peak times gas fees

15:10can spike to levels that make small transactions totally uneconomical we've all seen those crazy

15:16gas fee charts during mints or market volatility yeah and this leads to that critical question the

15:21sources wrestle with can ethereum truly be the world computer if using the base layer is often

15:26prohibitively expensive for the average person or does it just become a settlement layer for whales

15:31and l2s and is relying on layer twos a perfect solution well that's the debate the road map is l2

15:37centric the idea is ethereum l1 provides ultimate security and decentralization while l2s provide the scale

15:44dank sharding is meant to make this seamless and cheap but doesn't using l2s introduce new

15:49complexities bridging assets maybe different security assumptions depending on the l2 that's

15:55the valid critique yeah it fragments the user experience instead of just using ethereum you might

16:00be using arbitrum or optimism or zk sync each might have its own nuances its own potential bridging risks

16:07although technologies like zk roll-ups aim to inherit ethereum's full security it's not as simple as just

16:13using one chain it isn't and that complexity that fragmentation opens the door for competitors who

16:19offer a simpler more unified high-speed experience on a single layer which brings us neatly to the

16:25competition the so-called eth killers right while ethereum was grappling with scaling via l2s other layer

16:32one blockchains took a different approach they went from monolithic scaling designing the base layer

16:36itself to be super fast and cheap from the get-go who are the main contenders the sources point to

16:41solana and avalanche are frequently mentioned solana in particular with its unique proof of history

16:47consensus achieved incredibly high transaction speeds and low fees early on they captured significant

16:53market share in areas like high frequency defy trading some gaming applications areas where low

16:59latency is absolutely critical so the risk scenario is if these faster simpler l1s continue to innovate and

17:06capture the next wave of killer apps maybe in areas like dupin decentralized physical infrastructure

17:11networks or the metaverse or mass market gaming then they could siphon off significant economic

17:16activity that might otherwise have landed on ethereum or its l2s and since eth value is tied to that utility

17:23to that demand for gas losing market share in key growth sectors would definitely impact its long-term

17:29investment case it's a battle of architectural philosophies almost modular security first versus monolithic

17:35speed first that's a good way to put it investors need to weigh which approach they think wins out

17:40in the long run for attracting developers and users globally okay scalability and competition

17:45are huge technical and market risks what about the external risks regulation ah the ever-present elephant

17:52in the room for crypto regulatory uncertainty is a massive overhang especially for ethereum more so than

17:59for bitcoin why mainly because of the ongoing debate about whether each should be classified as a

18:05security or a commodity especially after the merge and the move to proof of stake okay unpack that bitcoin

18:11seems to have mostly cleared the hurdle generally viewed as a commodity like gold why is eth different

18:17it comes down to staking regulators particularly in the u.s look at things through the lens of the howey test

18:23to determine if something is an investment contract and therefore is security one prong that test involves

18:29an expectation of profits derived from the efforts of others and staking eth earns rewards exactly some

18:35regulators might argue that staking eth locking it up with validators who run the network and earning

18:40staking rewards looks like an investment where you expect profit based on the efforts of those validators

18:45and the core developers managing the protocol that could push it towards being classified as a security and

18:50if eth is deemed a security what happens then it would be a massive shift staking services exchanges listing

18:58eth defi protocols interacting with it they could all fall under much stricter more complex securities

19:04regulations it would likely hinder innovation reduce liquidity and make it much harder for traditional

19:09institutions who need absolute regulatory clarity to get heavily involved beyond maybe just holding an etf

19:16so that uncertainty is a major blocker for a big cautious institutional money it's definitely a significant

19:22factor slowing things down while the etf provides a regulated path broader integration into the

19:28financial system faces this hurdle until there's clear regulatory guidance okay so real risks scaling

19:34competition regulation but despite these the overall tone from the sources seems to lean towards strong

19:41long-term potential assuming execution let's try to synthesize this for the listener what's the fundamental

19:46difference in the investment thesis between eth and btc that's the absolute core takeaway bitcoin's

19:52narrative is digital gold it's about being a provably scarce secure neutral store of value a potential

19:59inflation hedge a digital equivalent to gold in a portfolio its value comes from that scarcity and

20:05security okay and ethereum ethereum's investment case according to these sources is fundamentally

20:11different it's less about being just digital gold and more about owning a piece of the internet's future

20:16infrastructure owning eth is like owning shares in the foundational layer of web 3. so its value isn't

20:22just scarcity but driven by the demand to use the network exactly the value is tied directly to the

20:28economic activity happening on top of it the demand for eth as gas to power defy to mint nfts to run daos

20:35to secure layer twos that utility demand is what theoretically drives the price and the burn mechanism

20:40you're betting on the growth of the entire decentralized economy built on its rails you can kind of see that in the

20:45market sometimes right when things are risked off bitcoin might hold up better as digital safety but

20:50when there's excitement about new apps and web 3 growth eth often catches a stronger bid because

20:55it powers that innovation that's often the dynamic yeah so if we boil down the potential scenarios from

21:01the sources for you the investor scenario a ethereum executes well on scaling with dank sharding

21:08l2's flourish institutions continue to build and adopt via things like etfs and tokenization in this

21:14case the prediction is bullish continued growth and staking yields eth potentially becomes more

21:20deflationary it solidifies its place as the dominant smart contract platform and settlement layer right

21:27scenario b the scaling roadmap falters l2's remain clunky or fail to gain mass adoption or competitors

21:32like solana or others genuinely steal significant market share in key growth areas like gaming or social

21:37then the investment case weakens less network activity means less demand for gas less eth burn

21:43potentially lower staking yields the value proposition based on utility or roads so the bottom line from

21:49synthesizing all this research is ethereum is definitely not a risk-free bet its success hinges

21:55on continued technical innovation and execution but but its existing network effects are immense its track

22:01record and birthing multi-billion dollar industries like defy and nfts is undeniable and its position as the

22:08most secure and decentralized smart contract platform gives it a very strong unique foundation it's

22:14essentially an investment in the core utility layer of a potentially massive future decentralized

22:19internet that's the long-term potential you're weighing against the risks perfectly summarized okay

22:23that leads us to our final thought something for you to really mull over based on everything we've

22:26discussed right we talked a lot about dank sharding making the base layer cheap and robust enabling layer

22:32to scale massively assume for a moment ethereum pulls this off assume institutional adoption continues

22:39we saw defy emerge we saw nfts emerge what's the next totally unforeseen maybe even unimaginable

22:45killer application that becomes possible only when you have this super secure globally accessible

22:51settlement layer with incredibly cheap data availability provided by blobs what becomes possible when the cost

22:58of using that secure base layer plummets is it truly decentralized social media that can handle

23:03billions of users without censorship is it global digital identity systems is it something related to

23:08ai interacting on chain what's the next big thing that this infrastructure unlocks and if that next

23:14killer app does emerge on ethereum leveraging that cheap secure foundation what is owning a piece of

23:19that foundational infrastructure ultimately worth something to think about definitely something to think

23:23about that wraps our deep dive today into the investment case for ethereum

23:28we hope breaking down these sources gave you a clear perspective on the technology the economics and

23:32the risks thanks for joining us we'll see you on the next deep dive

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