What’s the best cryptocurrency to buy? My response is Ether (which runs on the Ethereum network). I’ll show you why.
But before I do that, let me say something: crypto is a high-risk investment, and you should not invest money you are not willing to lose. While I do believe in Ether and Ethereum and have invested in it myself, I do not think that most people should put more than 5% of their portfolio in crypto.
Ok, with that said, let’s see why Ether is the best cryptocurrency to buy!
Note: This post contains referral links. Plus, like everything on this site, this is just my opinion, and not financial advice.
Why Ether is the Best Cryptocurrency to Buy
It’s the Second Biggest Crypto
Going by market capitalization, Ether is the second-biggest cryptocurrency, with a market cap of over 18 billion US Dollars. You can always check the latest numbers and prices on CoinMarketCap.
It has the Biggest Developer Ecosystem
One of the most compelling reasons for why Ether is the best cryptocurrency to buy is because it has the most people working on it, period. Per a widely-cited report from Electric Capital, Ethereum has around 1,243 monthly active developers (as of June 2019), which far surpasses Bitcoin’s paltry 314.
Per the report, 18% of all open-source crypto developers work in the Ethereum ecosystem, which is 4x more than Bitcoin’s developer count.
There’s a Face Behind It
Unlike with Bitcoin, there’s a known person behind Ether. His name is Vitalik Buterin, and this is him:
Vitalik (as he’s known) is credited with inventing Ethereum and Ether, and has been its public face for many years now. He has a Twitter account and makes appearances all over the world.
This is no guarantee of anything, but it’s certainly something to consider, since practically every major company, institution, or government on earth has known people behind it. Vitalik has staked his career and reputation on Ethereum. The same can’t be said for Bitcoin, which was invented by an anonymous human or machine known as Satoshi Nakamoto.
Ether is the Best Cryptocurrency to Buy Because Many Others are Based on the Ethereum ERC-20 Standard
The Ethereum network has something called ERC-20 tokens. One of their uses is to create other cryptocurrencies (that are not Ether) that run on the Ethereum network. For example, the Gemini Dollar (a US-dollar backed-and-pegged cryto) is based on the ERC-20 standard.
This is yet more evidence of the power and versatility of the Ethereum network.
It has Smart Contracts
To me, smart contracts are one of the most powerful (if not the most powerful) ideas in crypto. At its most basic, they are contracts that automatically execute themselves.
For example, say you want to sell you car. With a smart contract, you could, in the future, place all of the relevant data on the blockchain: title information, registration, price, etc. When someone agrees to buy it, all they have to do is pay you using Ether. At that point, the smart contract will execute, and everything will automatically be transferred to you, including the registration.
Another example would be crop insurance. If certain conditions are met (a storm destroys crops in insured farms), a smart contract can automatically execute and pay on the policy.
As you can imagine, smart contracts have almost limitless potential to speed up and streamline a lot of the transactions that take place today.
Here’s a good video on smart contracts:
But Don’t Other Blockchains Also Have Smart Contracts?
Yes, but none have the market capitalization and developer ecosystem of Ether/Ethereum. Bitcoin does not have an advanced smart contract functionality.
You Can Earn Interest on It
From a pure investment perspective, Ether is the best cryptocurrency to buy because it’s one of the few that is supported by “crypto banks” where you can deposit your crypto and earn interest on it. One example would be the BlockFi Interest Account, which currently earns about 4.1% per year on Ether.
Ether is the Best Cryptocurrency to Buy Because Many Regulated and Reputable Exchanges Carry It
There are many, many crypto exchanges, and many, many are a joke. Poor controls, fraud, and questionable legality abound.
Some are legit – and those that are legit nearly always carry Ether.
For example, there’s Gemini (which I use). It’s a US-based exchange founded by Cameron and Tyler Winklevoss, and is licensed and regulated by the New York State Department of Financial Services.
Coinbase (licensed by most US states) is another reputable exchange that deals in Ether.
In short, Ether is not one of those cryptos that are only available in shady exchanges that may or may not care about laws and compliance. It’s available on many exchanges, including the best and most compliant ones.
There’s a Huge Consortium of Companies Associated with It
I’m talking about the Enterprise Ethereum Alliance, which is “…a member-led industry organization whose objective is to drive the use of Ethereum blockchain technology as an open-standard to empower ALL enterprises”. Here are some notable members:
- The Bank of New York Mellon
- Ernst & Young
- FedEx Corporate Services, Inc.
- JP Morgan Chase Bank
- Rutgers University
If these (and many more) companies and institutions have proudly allowed their names to be associated with Ethereum, well that tells you something. It’s another piece of evidence as to why Ether is the best cryptocurrency to buy.
Its Reddit Community has Over 400,000 Members
The size of something’s Reddit community is a mark of popularity. Visit the Ethereum community here.
Even Traditional Brokers are Getting in on the Action
Besides Bitcoin, Ether is one of the only cryptocurrencies that is starting to see support from traditional stock brokerages. For example, Fidelity Digital Assets plans to support Ether.
Robinhood is another stockbroker that currently supports both Ether and Bitcoin.
Why Isn’t Bitcoin the Best Cryptocurrency to Buy?
Listen, I like and own some Bitcoin. Still, I don’t think it’s the best cryptocurrency to buy, because it simply lacks many of the features of Ether, and I believe that a lot of its power is based on the simple advantage of being the first crypto.
Here are some features it lacks:
- No full-featured smart contract functionality.
- Its creator is known only by a pseudonym. He/she/they/it is essentially anonymous.
- Its developer ecosystem is much smaller than Ethereum’s.
Nonetheless, by all means buy some Bitcoin as a diversification measure. I just would not recommend making it your main crypto investment.
Why Should You Buy Ether?
Because you’re making a bet on the future. Of course, don’t throw all of your money into it; I suggest that crypto make up around 5% of your portfolio. (Or whatever you feel comfortable with, but I wouldn’t pass the 10% mark).
Yet, I believe that blockchain technology and smart contracts are simply too compelling to wind up in the dustbin of history. So, I’ve decided to dedicate a bit of my portfolio to it.
Where Should You Buy Ether?
So there are several reputable places to buy Ether, using US dollars. Here are some:
The Gemini Exchange
I personally use Gemini as my primary place to acquire Ether. By a narrow margin, I think it might be the best place to buy this cryptocurrency.
In terms of pros, I like that it’s US-based and US-regulated. Plus, it’s been around for years now and was founded and is run by two well-known individuals (the Winklevoss twins).
On the downside, it’s gotten expensive. For example, on the app, I’m currently being quoted a $1.99 transaction fee to buy $50 of Ether (here’s the fee schedule). I don’t think that’s worth paying unless you’re buying like at least $200.
For more, here’s a video with the Winklevoss twins:
I think they’re legit, serious people. But, I also think Gemini is currently overpriced, unless you’re talking about larger dollar amounts.
Robinhood is a broker best known for pioneering zero-commission trades. I have an account and mostly use it for traditional stocks.
However, Robinhood also has its Robinhood Crypto service, where you can buy and sell Ether and Bitcoin for no commission.
The downside is that Robinhood Crypto currently does not let you deposit or withdraw crypto; you must hold it within their service. Still, as a licensed securities broker, I think Robinhood is trustworthy enough.
If you’d like to trade on Robinhood, sign up here, and we’ll both get a free share of stock!
I’ve never personally used Coinbase, but it’s very well-known and US-regulated. Some years ago, I tried to set up an account but found their customer service lacking, though my understanding is that it’s much better now.
In any case, if I did not have Gemini and Robinhood accounts, I would not hesitate to use it.
My Suggestion in Terms of Where to Buy
If you’re going to invest a bigger sum (in the thousands of dollars), I’d go with Gemini. They’ve been in this game for a while, and you’ll have full control of your crypto.
Conversely, if you’re just going to dip your toes in with a few tens or hundreds of dollars, you can’t beat the simplicity and cost of Robinhood. You can’t do anything with your crypto but hold it at Robinhood, but if you just have a few dollars’ worth, you probably won’t need to.
Summing Up Why Ether is the Best Cryptocurrency to Buy
So here’s a prediction: as crypto matures, more and more cryptocurrencies will fall by the wayside, with just a few winners emerging. For the reasons I’ve explained, I think Ether will be one of those winners, and has the potential to change the world. In short, here are some of the things going for it:
- Smart contracts.
- A known founder.
- The Enterprise Ethereum Alliance.
- It has the second-highest market capitalization.
- Currently, it has the biggest developer community, by far.
And that’s a wrap! Good luck with your investments!
Do you agree that Ether is the best cryptocurrency to buy? If not, which do you prefer and why?
Tom @ Dividends Diversify says
Great information, Miguel. But, not an area I have ventured with my investment dollars yet. It’s on my watch list. Tom
I’ve “invested” in crypto, too. I think I own one whole Ether.
I bought most of my coins via Coinbase in 2017 right before the whole bubble thing.
Currently I’m exploring earning interest with my Crypto via BlockFi, but most of my coins are in my own private wallets.