RAD: Should You Invest in Ethereum Before the Merge?
Are you ready?
It’s that time of the week again … time to get RAD!
If you are just joining us, RAD — or Reader Appreciation Day — is when we turn the spotlight off us and on to you, Winning Investor Nation!
We share your feedback and questions in every Saturday issue.
This week, your questions all had a major theme in common: cryptocurrency!
So I turned to Ian King, our resident crypto expert, to help me out.
Let’s dive right in!
(Responses have been lightly edited for clarity and length.)
Should we invest in Ethereum before the merge?
We’ll start with Mary’s question. She wrote:
I signed up for your newsletter in July and just discovered your webinar videos. These are the most informative things I have found since I started searching for crypto information last fall. At the end of the one from 8/29, we were invited to send a question for you. So here it is.
As background I will say that I purchased Ethereum (ETH) and a couple smaller coins […] at the end of November.
[…] So I bought $500 of ETH. Now it is only worth $184. This was very unexpected […]
So now since the price is way down, is it important to buy more before the event? Or will this value be building back up as we get closer to the event?
[…] Thanks for taking the time to answer.
Here’s what Ian has to say:
Hi, Mary! Thanks for writing in.
We’re witnessing the birth of an entirely new asset class. Bitcoin (BTC) is 12 years old. Ethereum is seven years old. Most DeFi (decentralized finance) protocols are less than two years old.
The Ethereum merge is one of the most anticipated events in the history of crypto, and that means you should expect extreme volatility — in the short-term.
That said, I would be careful buying into the event. The price could easily rally — or sell off as much as 50% in a few days. I would wait until the dust settles on the merge before diving in to invest in Ethereum.
What’s the deal with Helium? — (The crypto token.)
Our next two questions are about Helium (HNT).
(If you missed Ian’s update on Helium, you can check it out here.)
So if this is good news for Helium, why has the price dropped significantly? Should I see this as a great opportunity to buy Helium at a discount or should I be concerned that Helium will disappear and just become part of Solana (SOL)? Thank you for your clarification!
Nathan also asked about Helium. He wrote:
Saw your update, but not clear what it means if you are a holder of HNT? Will you eventually receive an equivalent amount of SOL in exchange for HNT? Or does HNT continue to be a token, just on the SOL chain?
Here’s Ian’s response:
Hey, Stephanie and Nathan! Great questions.
The reason the price is dropping is that once the network moves to Solana, there won’t be a need for Helium staking. Validators won’t be paid for securing the network.
These validators must hold a minimum of 10,000 HNT. Many of them are large funds that are moving out of HNT into other tokens that earn yield, like Ethereum.
Keep in mind, these are different from the hotspot miners who get paid to provide network coverage.
Also, there are so many new hotspots on the network (almost a million). Many of them haven’t seen the same type of returns as the early adopters, so they might be selling to cover the costs of purchasing miners.
It’s common for cryptos to pull back 90% off their highs. For me, the most important thing in a crypto asset is if its real-world adoption is continuing.
For instance, Helium is now moving into 5G and other forms of bandwidth. That’s a good sign. Even though prices are down significantly from their highs, Helium is still innovating.
Thanks to Mary, Stephanie and Nathan for the hard-hitting questions.
Bonus: A RAD Note
Today, Ian answered your crypto questions on if (and when) you should invest in Ethereum and Helium.
So let’s end this week with a truly RAD-ical note!
David wrote in to say:
I appreciate the news about Helium moving to Solana’s blockchain! I love learning the new news, and the markets, sectors, companies, strategies, charts, all the different types of options and when to use, which for a certain stock and why!
I personally have never mined any Helium, or any other cryptos, blockchains, etc. I’d love to someday learn to mine crypto but am always learning and look forward to the future!
Thank you, David! Ian, Amber, Alex (woof!), and the entire Winning Investor Daily team love being able to bring you new content each week. We truly appreciate you.
Don’t forget! If you have a totally RAD question you’d like answered, or just feedback you’d like to see featured, write in to WinningInvestorDaily@BanyanHill.com.
And if you missed any of this week’s articles, you can catch up by clicking on the links below.
Check them out!
This Week’s Winning Ideas
Helium Moves to Solana: What to Know NOW — Helium is one of the most ambitious projects, not only in crypto, but also in all of technology. And it’s moving to a new network…
What the Latest Jobs Report Means for the Economy — Amber Lancaster and Ian King jump into the August news report. They’re here with the facts, the data and what you can expect going forward.
5 Stocks to SELL for a Strong Next Gen Portfolio — Here are 5 stocks that you should clear out of your next-gen portfolio to lock in the biggest gains in the next bull market.
Crypto’s Breakthrough Moment Is NOW — With ETH 2.0 — Ethereum’s upcoming merge to ETH 2.0 is a critical moment in crypto history. It could soar to 20X the size of bitcoin. Here’s why.
Next-Gen Portfolio Maintenance in 4 Easy Steps — Step up your long-term profits with 4 simple steps trusted by the world’s most successful tech investors.
Senior Managing Editor, Banyan Hill Publishing