- Ethereum price hovers around $1,550 after a bullish start to 2023.
- Investors are already detailing fundamental reasons why the current levels are the best place to accumulate ETH.
- Developer activity, deflationary status, and staking are a few of the most important reasons that make the smart contract token stand out from the rest.
Ethereum has played an extremely important role in building the cryptocurrency ecosystem in the world. Although many blockchains were launched after Bitcoin’s start in 2009, ETH became a major focus of speculation due to the wide range of potential applications it could offer if it were to be successful. Now, Ethereum is the second-largest cryptocurrency in the world, with a market capitalization of $187 billion.
Let’s take a look at three reasons why Ethereum may be a good long-term investment.
Developer Activity
Despite a good start to 2022, the latter half of the year was brutal and caused investors to suffer significant losses as key players in the industry collapsed. This caused many projects to go under due to affiliation or lack of funds. Regardless, the developer activity seen in the Ethereum blockchain failed to decline.
The ETH blockchain saw an addition of 234 new developers between December 2021 and 2022, with a total of 5,750 developers working on the smart contract platform. The number of developers combined with the activity of these builders is one of the best ways to measure the value of a particular blockchain. Additionally, as noted in Electric Capital’s developer report, ETH’s ecosystem of developers is 2.8x higher than the next one, which is Polkadot.
Electric Capital’s developer report
Deflationary status
Since the implementation of the Merge update 126 days ago, a total of 2,464 ETH have been burned or taken out of existence. The Merge was a hard fork that migrated Ethereum from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) protocol. In contrast, if Ethereum had stuck with PoW, there would have been 1.48 million ETH added to the network.
From a long-term perspective, the deflationary aspects make Ethereum one of the best investment vehicles as Bitcoin is still an inflationary asset since roughly 328,000 BTC are minted per year until all 21 million BTCs are mined.
ETH ultrasound
Staking
Ethereum enabled staking when it moved from PoW to PoS, and since then, 16 million ETH have been staked. The current staking reward sits around 5.3% Annualized Percentage Rate (APR).
More recently, it was announced that the Ethereum blockchain would soon undergo another upgrade known as Shanghai, which will enable withdrawals of staked ETH.
ETH staked
Combining this information with the Ethereum being a deflationary asset, the real staking yields will only increase in the future. Additionally, with the Shanghai upgrade, users can stake and unstake at will, which is likely to result in a high participation rate, pushing the total staked ETH much higher by 16 million ETH.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ethereum whales turn bullish with Shanghai upgrade less than a month away

Ethereum (ETH) whales holding between 1,000 and 10,000 ETH have been scooping up the altcoin consistently for a week. With the countdown to the Shanghai upgrade and the ETH token unlock event, there is a spike in Ethereum demand among retail investors.
Ripple price to close the week with a bang as next week will be crucial for another 20% profit

Ripple price is closing this week with very profitable numbers, even if a fade is ongoing. The fade occurred after bulls received a firm rejection at $0.50 and have been trading lower from that level since. If bulls can keep their hands on this momentum and the Relative Strength Index (RSI) is not overbought, at least some 20% profit is being prepared for next week.
Will Cardano price advance as analysts call it one of the favorite altcoins next to EOS and COLT to pop?

Cardano (ADA) price is making the cut and has been shortlisted by several analysts that have put ADA in their top altcoin, primed to explode to the upside soon. ADA is flirting with a second week of gains and could recover its attempt to hit $0.415 as a crucial level for any further uptrend or downtrend.
Is the new partnering-up strategy the right way for Vechain price to avoid a 30% correction?

Vechain (VET) price had a busy week as several new partnerships were announced. Next to integrating with Dappradar to promote cross-chain visibility, the partnership with Boston Consulting Group might be the one that draws the most attention. Vechain price though is not taking this news in a good way and rather is at risk of tanking further.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?

Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.