Ethereum, like other cryptocurrencies, has lagged the broader market in 2022. The digital coin has dropped more than 20% this year, bringing its total market cap to about $238 billion. At its peak, ether had a market value of over $600 billion.
Why has Ethereum dropped?
There are several reasons why the Ethereum price has declined sharply in 2022. First, the Federal Reserve has embraced a more hawkish tone as US inflation has surged to the highest level in over 40 years.
It started hiking interest rates in March when it boosted its benchmark rate by 0.25%. The bank then hiked by 0.50% in May and hinted that this trend will go on for a while. Therefore, there is a possibility that the bank will push rates above the neutral point of 2.4% in December.
Second, Ethereum’s ecosystem has weakened substantially in 2022. For example, the total value locked (TVL) in its DeFi ecosystem has declined from over $150 billion to about $70 billion. The recent crash of Terra’s ecosystem caused more people to withdraw their funds from DeFi apps.
Notably, the performance of the Non-Fungible Tokens (NFT) industry has been a bit weak, with volumes in platforms like OpenSea and Rarible falling by double-digits recently. As a result, data by Etherscan shows that the volume of Ether tokens exchanged has also declined.
Finally, Ethereum’s merge with the Beacon Chain has been postponed to the third quarter of the year. This postponement has pushed more people away from the coin.
Is it worth to buy Ethereum in Europe?
Europe is one of the top markets for cryptocurrency investment and trading. It is estimated that about 17% of all people in Europe have invested or traded cryptocurrencies in the past few months. While this number lags behind other regions, it is still a strong performance since the continent has a population of almost 800 million people.
While Ethereum’s price has declined sharply, it makes sense to invest in it for several reasons. First, Ethereum has a strong market share in key markets like DeFi, NFTs, and games even as it faces strong competition from the likes of Solana and Avalanche.
Second, the collapse of Terra’s ecosystem will likely bring more people to Ethereum because of its strong market share and track record in the industry.
Third, the upcoming merge with the Beacon Chain and the shift to sharding will improve the network and solve some of its top challenges like slow speed and high gas costs.
Further, like Bitcoin, Ethereum has always been a cyclical asset. For example, its price crashed between May and July 2021 and then made a swift recovery to an all-time high in November.
How to buy Ethereum in Germany
There are different ways and payment methods you can use to buy Ethereum in Europe. The top payment methods to buy Ethereum are PayPal, bank transfer, and credit card. If you are not very sure what are the pros and cons of each payment method, there are many reviews out there where they include a step-by-step guide on how to do it.
- You can buy Ethereum in one of the popular exchanges around. Most large exchanges are legal in Germany. They include companies like Coinbase, Kraken, and Crypto.com. Using these companies is relatively easy since they just require your email address and your verification details.
- You can use forex and contracts-for-difference (CFD) brokers to buy Ethereum. These companies offer Ethereum in a CFD format, meaning that people can use leverage to optimize their trades. Buying a CFD gives you exposure to Ethereum prices without owning the real asset. Examples of these companies are Plus500, Libertex, and eToro.
Crypto brokers are perfect for newcomers. According to a German site (Cryptomonday.de), “beste broker für kryptowährungen bieten dir im Vergleich zu anderen Möglichkeiten ein höheres Maß an Komfort. Das führt zwar zu etwas höheren Gebühren, aber die Broker-Plattformen sind gut reguliert und sicher.”
This translates in English as “Cryptocurrency brokerages will provide you with a higher level of convenience relative to other avenues. While this translates to higher fees, brokerages are well regulated, and secure.”
- Decentralized exchanges (DEX) are also popular ways to buy Ethereum in Germany. A DEX is a community-owned platform where holders of the token make decisions about the ecosystem. They set the cost and receive the fees charged to clients. Examples of popular DEXes are Uniswap, PancakeSwap, and 1Inch.
- It is possible to buy Ethereum from mobile wallets like Skrill and PayPal. All you need to do is to select the crypto option and indicate the volume that you want to buy.
Ethereum is the second-biggest cryptocurrency globally. It is often seen as the most important blockchain platform because of the networks it supports. For one, most cryptocurrencies you know like Shiba Inu and ApeCoin leverage this technology. In this article, we have explained the coin’s recent price action and highlighted some of the best places to buy it in Germany.