Yahoo Movies Ethereum: The Best Cryptocurrency for Your TFSA?
The cryptocurrency industry has gone through a massive boom recently, and many investors are now interested. Several cryptos have significantly outperformed even the best growth stocks over the last year. But after a massive rally the last 16 months, which is the best to buy for your Tax-Free Savings Account (TFSA); Bitcoin, Ethereum or something else?
For years the industry has been controversial, but it looks like many governments, companies and investors are starting to accept cryptocurrencies as legitimate assets and investments.
One of the problems with crypto and why it’s been so controversial is because there is such little regulation in the space.
This makes it a lot riskier because there is the potential for fraud. It’s also a difficult industry because it can be hard to understand the technology behind each coin.
For many investors, though, the big gains from Bitcoin, and now more recently, Dogecoin, are enticing, and investors understandably want to get involved. Like with stocks, though, it’s important to research it and make sure it has value if you’re making an investment.
There have been plenty of examples of bubbles in the past, and there will be plenty in the future. So those cryptocurrencies that have rallied exceptionally but have little value to back those gains likely won’t pan out in the long run.
Should you buy Bitcoin?
Bitcoin is an asset with potential that could be worth a long-term investment in your TFSA. The coin will always have value because it’s the revolutionary technology that spurred innovation in the industry.
It also has a natural advantage because it was the first coin—one of those being the fact that it’s the main trading pair for thousands of coins in existence.
The problem is that there are many shortcomings of Bitcoin and its technology. That’s part of why so many new coins have been created over the years, with the aim of improving the issues in the cryptocurrency industry.
So Bitcoin will always have value because it’s so well-known and the first comer in the industry. However, the best investments today will be those cryptocurrencies that offer the most technological potential.
That’s why last month, I recommended investors focus their long-term investment in the crypto space on Ethereum.
Here’s why Ethereum is the best cryptocurrency for your TFSA
In my view, Ethereum offers investors the best potential long-term. That’s why I think one of the best stocks to buy for your TFSA today is The Ether Fund (TSX:QETH.U).
Ethereum is a decentralized, open-source blockchain. However, the main differentiator from Bitcoin, which gives it so much potential, is its smart contract functionality.
This means you can do a lot more with Ethereum’s blockchain, such as running decentralized applications. It’s a big step up in blockchain technology. And the more popular the Ethereum blockchain gets, the more the value of its native cryptocurrency, Ether, will rise.
That’s why The Ether Fund looks so promising as a long-term investment for your TFSA. Investors can gain exposure directly to Ether, which overtime should continue to grow in value.
More companies are quickly adapting to this technology too. Visa, for example, is an example of a major company that has announced its intention to use the Ethereum blockchain.
The potential of Ethereum and, consequently, Ether haven’t gone unnoticed, though. Investors have been quietly buying up Ethereum lately, even as Bitcoin has been rangebound.
Since I recommended Ethereum to investors just one month ago, it has already gained a whopping 67%. So although Bitcoin may not be in the news lately, and speculative cryptocurrencies like Dogecoin continue to make headlines, Ethereum quietly continues to rally, which is only making it more expensive to buy for the long-term.
So if you’re looking to make an investment in the cryptocurrency industry, I’d consider Ethereum, and I’d consider it soon.
The post Ethereum: The Best Cryptocurrency for Your TFSA? appeared first on The Motley Fool Canada.
Speaking of investments you'll want to make soon, here are the top 10 stocks to buy in the month of May!
The 10 Best Stocks to Buy This Month
Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.
Click Here to Learn More Today!
More reading
Forget Dogecoin: 1 Canadian Growth Stock to Buy in May 2021 for Big Gains
Canadian Investors: Here Are 2 of the Best Stocks to Buy Today
Short-Sellers Beware! WELL Health Stock Is a Rocket That Could Be Ignited Anytime
5 Years From Now, You’ll Probably Wish You’d Grabbed These Stocks…Click here now for your free subscription to Take Stock, The Motley Fool Canada’s free investing newsletter. You aren’t on the list to receive our newest stock picks — but it’s not too late. 2021
