Is Ethereum the Smartest Investment You Can Make Today?

Crypto markets have had a difficult 2025. Ethereum (CRYPTO: ETH) is no exception. The value of this popular cryptocurrency has fallen by nearly 40% in a matter of months.

If you've been waiting to add Ethereum to your portfolio, this looks like the ultimate buying opportunity. There are two reasons in particular to get excited.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Ethereum has this advantage versus Bitcoin

When it comes to cryptocurrencies, Bitcoin is by far the most popular. I've written recently about how Bitcoin's valuation -- which has also plummeted in value through the first few months of 2025 -- looks particularly attractive right now. That's due to Bitcoin's potential as a store of value. Similar to gold, Bitcoin retains a value simply for being itself. It needs no underlying business or activity to have long-term value in the eyes of holders.

Ethereum is a bit different. Instead of a basic cryptocurrency with simple rules of operation, the network was designed to be a decentralized virtual computer for running code. According to the Ethereum Foundation, "The Ethereum Virtual Machine (EVM) is a decentralized virtual environment that executes code consistently and securely across all Ethereum nodes."

What exactly does this mean? At its core, developers can build services and applications on top of the Ethereum network, with the Ethereum network executing commands and transactions in a secure, decentralized way. Today there are more than 4,000 decentralized applications (dApps) running on Ethereum -- significantly more than any competitor. And because many of these dApps function best by communicating and transacting with each other, Ethereum has an ecosystem advantage that only improves.

This ecosystem advantage makes Ethereum the strongest programmable blockchain in existence today in terms of raw adoption. With limited programmability, Bitcoin is at a major disadvantage in this department. However, like I've written in the past, Bitcoin's potential as a store of value -- essentially making it the "digital gold" of our time -- remains unrivaled.

But there's one other advantage that Ethereum has against every other competing project.

This is Ethereum's hidden superpower

As a programmable blockchain intended for other applications, services, and even other networks to be built on top of it, Ethereum's long-term value will be directly impacted by the number of developers building on top of it. In this department, Ethereum is indisputably king.

Right now, there are over 5,000 full-time developers working on Ethereum and its related projects. Solana, the next-most popular programmable blockchain, has fewer than 1,200 developers working on its network and associated projects.

Developers want to develop projects that users will use. That means building on not only the most powerful blockchain, but also the one with the greatest adoption by both users and developers alike. That's especially true given a dApp's potential is often limited to the number of other dApps it can connect to. Whether it's the sheer number of dApps already built on Ethereum, the sheer number of developers actively working on the network, or simply its name-brand advantage, Ethereum has several durable competitive advantages that grow over time due to positive feedback loops.

After the correction, Ethereum's market cap is down to just $250 billion. While it's speculative to predict exactly how much the decentralized economy will be worth years or even decades from now, it's clear that Ethereum has a heavy lead on the competition, and its competitive advantages should help it retain its No. 1 position for some time to come. If you've been waiting to buy, this looks like your chance. Just make sure to remain patient.

Should you invest $1,000 in Ethereum right now?

Before you buy stock in Ethereum, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ethereum wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $726,481!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of March 18, 2025

Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.