Ethereum is one of the best-known decentralized blockchain networks in the world, its popularity deriving from the use of smart contract functionality. Ether, the native cryptocurrency of the platform, is the second most important digital asset in the world, second only to Bitcoin in terms of market capitalization levels. The open-source software was released in 2015 and was designed by a group of programmers.
In the initial white paper, Vitalik Buterin described Ethereum as a network with the potential to build and deploy decentralized applications. When the blockchain was eventually launched, it is quite likely that many didn’t grasp its full potential. Nowadays, traders analyze ETH price chart patterns to determine the best course of action for the future. Two years ago, Ethereum transitioned to a proof-of-stake consensus mechanism as part of “the Merge,” the latest upgrading process at the time.
The new functionality drastically reduced energy usage, with the figures decreasing by 99% within the Ether ecosystem. The change didn’t go unobserved, and it indeed seems like many find themselves increasingly drawn to this asset.
Long-term holders
The long-term holders are the individuals who have held cryptocurrencies for at least 155 days. This strategy aims to obtain value from the steady price appreciation of currencies. In fact, many investors have been holding on to their cryptocurrencies for many years. While it can seem like a relatively low-effort plan, the truth is that doing this will take a lot more discipline than you may imagine.
The fear of missing out remains as strong as ever in the trading environment, and resisting the siren’s call can be quite the challenge. This is particularly the case if you’re surrounded by individuals who have fewer standards when it comes to cryptocurrencies, as you will naturally become worried that they will hit the jackpot and you’ll be left behind. Some opportunities also seem too good to miss, but, as a general rule, if something sounds too good to be true in the crypto world, you should remain cautious.
Investors being fooled by a very believable scam are not as rare as you might think, which is why remaining vigilant at all times is an absolute must.
Ethereum vs Bitcoin
As the two largest cryptocurrencies in the world, Ethereum and Bitcoin naturally have a unique way of capturing people’s attraction. The percentage of long-term crypto holders is a critical metric as well since it determines the stability of a financial and trading environment. It can also keep volatility and outstanding selling pressures in check. Holding on to your assets will also help you deal with the highs and lows of the price point in a more efficient manner.
Doing this also guarantees that you will never be caught unprepared and that you don’t have to worry about losing a significant portion of what you earned because of poor timing. On the other hand, buying and getting rid of coins at a much faster pace is often associated with the concept of emotional trading. Such a scenario becomes problematic when you allow the hype and your highly optimistic outlook at the moment to divert you from your plans and the rules you had made beforehand.
Greed, impatience, fear, the fear of missing out, and feeling overly confident can all lead to a rude awakening, so try to stay away from them as much as possible if you feel like you’re developing unhealthy trading habits. In 2024, the number of long-term ETH holders increased slowly but steadily throughout all twelve months. This is in contrast with the Bitcoin holders, whose numbers have been steadily dropping.
The causes
One of the main reasons why Ethereum appears to be more popular among investors at the moment is because it seems to be on the right path. Growth is expected to occur on the blockchain, and 2025 is set to be one of the best years in Ether’s history. It only makes sense that the investors, who have long been associated with their ability to recognize the beginning of a bull run, are looking to join in on the hype before the price point becomes too elevated to make trading sustainable for the majority.
Between January and December 2024, the number of investors who have been holding on to their ETH tokens for at least a few months has climbed from 59% to 75%. The numbers are expected to continue growing in 2025 in anticipation of the upswing that will take place soon enough. During the same timeframe, the number of BTC long-term investors has dropped from 70% to roughly 62%. This means the investors are not as confident as they used to be about digital gold’s 2025 prospects.
Researchers believe that the US political landscape will be particularly beneficial to Ethereum over the next five years or so, meaning that ETH will end the decade in a good place. Yet, this doesn’t mean you should forget the importance of having a sound strategy that helps you achieve your goals. In fact, it might be more important than ever, considering the fact that periods of price appreciation are typically followed by no small amount of volatility.
The future
Although there’s no way to be 100% sure what the future holds for any cryptocurrency, it seems very likely that the price will continue growing. During the last month of 2024, inflows coming into the spot Ethereum ETFs have more than doubled, going from $1 million to $2.1 million. If the regulators and lawmakers feel inclined to be more accepting of cryptocurrencies, the situation will continue to improve. If you’re an investor, remember to stay up to date with the latest developments and avoid the pitfalls of FOMO and impulsive trading. Although they can seem like a good idea at the moment, you’re way more likely to lose money rather than gain it. Keep the big picture in mind and always move toward your goal. It won’t be easy in the beginning, as building a robust portfolio takes time, but it is well worth the effort.