Ethereum Just Approached $3,500. 3 Reasons This Leading Cryptocurrency Is Still a Buy
Ethereum is the world's second-largest cryptocurrency by market cap.
It has underperformed this year, especially compared to Bitcoin.
Several developing catalysts could change this.
10 stocks we like better than Ethereum ›
Cryptocurrencies are rounding into form. Bitcoin, the world's largest cryptocurrency by market cap, hit fresh all-time highs of more than $123,000 on July 14. The asset's run has also sent a jolt into Ethereum (CRYPTO: ETH), which shot up to almost $3,500 per token on July 17 after having a difficult year so far.
Ethereum has traded at much higher levels in the past (its record is $4,892 back in November 2021), and I think it's been a bit surprising to see the performance chart of the world's second-largest cryptocurrency diverge so much from Bitcoin's. Here are three reasons Ethereum can keep its momentum going.
1. The environment remains favorable
Republicans in the House of Representatives kicked off "Crypto Week" on Monday with the goal of passing three crypto bills that are intended to create a more favorable regulatory environment for digital assets.
The Genius Act is set to create a regulatory framework for stablecoins, which are digital assets backed by a commodity or currency. The Digital Asset Market Clarity Act (Clarity Act for short) would create a regulatory framework for digital assets that its backers say will provide "strong safeguards and long-overdue regulatory certainty." The Anti-CBDC (Central Bank Digital Currency) Surveillance State Act would prevent the Federal Reserve from issuing its own digital currency, which would essentially give the private sector first crack at stablecoins and other forms of innovation in the digital currency space. The Genius Act is the furthest along in the legislative process, having already been passed by the Senate.
Other potential tailwinds include lower interest rates, which have historically benefited cryptocurrencies. The market is expecting the Federal Reserve to make a few cuts to its benchmark federal funds rate later this year, with more to follow in 2026.
2. Institutional interest is heating up
As the regulatory environment continues to become more favorable, institutional investors and mainstream financial institutions will likely lose some of their trepidation about getting involved with cryptocurrencies. While Bitcoin could be the largest beneficiary of that, Ethereum is drawing interest as well.
Recently, SharpLink Gaming purchased nearly $48.9 million worth of Ethereum. Bitmine Immersion Technologies also recently announced a $250 million private placement led by a group of top crypto investors. The plan is to follow in the footsteps of Strategy, which has tapped the capital markets to raise funds that it then uses to buy Bitcoin. But in Bitmine's case, the plan is to buy Ethereum.
Part of the recent interest is around stablecoins because Tether and USDC, the two largest stablecoins, are issued on Ethereum's network. Fundstrat's Tom Lee, board chairman at Bitmine, said in a recent interview on CNBC that interest around stablecoins is set to drive Ethereum much higher this year and long term:
"Stablecoins have really exploded because consumers, businesses, and banks are really interested in adopting this. The majority of stablecoins are actually transacted on the Ethereum blockchain. And if Treasury Secretary [Scott] Bessent is right, and it goes from a $250 billion market to $2 trillion, that's exponential demand for Ethereum."
3. This metric suggests Ethereum is set to close the gap with Bitcoin
It's never easy to value cryptocurrencies because they don't generate earnings or cash flow -- at least, not in the traditional sense like publicly traded companies do. Still, as the asset class has grown more popular, many experts and analysts have tried to apply some sort of valuation methodology. One easy one to look at is the Ethereum-to-Bitcoin ratio, which divides the price of Ethereum by the price of Bitcoin.
Currently, the ratio is at roughly 0.025. While that's not the lowest the ratio has ever been, it's definitely toward the lower end of the spectrum, looking back to 2015. Now, historical data can never predict the future. It's also possible that Bitcoin's now more prominent position, which has it viewed as a form of digital gold, will continue to send its price to new highs and create a wider disparity in the ratio. But it's also quite possible that Ethereum is undervalued right now and well positioned for a run-up.
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 Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,281!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,415!*
Now, it's worth noting Stock Advisor's total average return is 1,058% — a market-crushing outperformance compared to 179% for the S&P 500. 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 July 15, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
27 minutes ago
- Globe and Mail
Market Analysis: July 23, 2025
Global Markets Canadian Markets Canadian markets edged higher on Wednesday, showing resilience even as both gold and oil prices remained under pressure. Canadian prime minister, Mark Carney, stated that the country would not settle for a 'bad deal' regarding U.S. tariffs. With the August 1st deadline for new U.S. tariffs looming, negotiations between the two nations appear stalled, casting doubt on whether a last-minute agreement can be reached. American Markets U.S. stocks climbed after news broke that the United States and Japan had reached a trade agreement. The deal, seen as favorable for Japanese automakers, lifted sentiment broadly across global markets. Google and Tesla is set to report earnings after the closing bell. For Tesla, it is an event highly anticipated by investors given the stock's recent volatility and questions surrounding the company's margins, growth strategy, and delivery performance. European Markets European stocks moved higher on optimism that a similar trade deal could be struck between the U.S. and European Union, especially one that benefits European carmakers. Automakers led the gains across major indices in Europe. Shares of German software giant SAP dropped, despite the company reporting a strong quarterly performance. Investors were disappointed that SAP chose to maintain its full-year guidance instead of raising it, dampening enthusiasm. In the UK, stocks reached yet another all-time high, driven in part by strong performances from mining and industrial sectors. A record number of UK-listed companies issued profit warnings in the second quarter, raising red flags about the upcoming earnings season and potentially signaling broader economic challenges. Corporate News Alibaba Group Holding Ltd: Launched Qwen3-Coder, its most advanced open-source AI coding model. Designed for complex programming tasks, it's strong in autonomous coding workflows. Inc: Acquired Bee, a startup making AI-enabled wristbands that transcribe and summarize conversations. America Movil SAB de CV: Swung to a Q2 profit of 22.28 billion pesos, driven by 11 billion pesos in FX gains and reduced financing costs. Revenue rose 14% to $12.46B. AT&T Inc: Beat Q2 profit estimates and added 401K wireless subscribers. Plans to invest $3.5B in fiber network using tax savings and raised free cash flow forecast for 2026–27 by $1B. Baker Hughes Co: Beat Q2 estimates with EPS of $0.63 vs. $0.56 expected. Gas tech orders up 28%, though overall revenue declined 3% YoY to $6.91B due to weaker drilling activity. Boeing Co: Offered union workers a 20% wage increase over 4 years, a $5K bonus, and more leave in its latest contract proposal. Capital One Financial Corp: Q2 profit rose to $2.77B ($5.48/share) from $1.21B. Interest income surged 32.5% to $10B; loan loss provisions jumped to $11.43B. Charter Communications Inc: Partnering with Comcast to launch an MVNO using T-Mobile's 5G network for business customers. Chubb Ltd: Q2 core operating income rose 13% to $2.48B; record investment income ($1.57B) and underwriting performance. Combined ratio improved to 85.6%. Coca-Cola Co: Jefferies raised target price to $84 (from $83) due to easing forex headwinds. Comcast Corp: Partnering with Charter on an MVNO service for business customers using T-Mobile's network. ConocoPhillips: In advanced talks to sell Oklahoma assets to Stone Ridge Energy for ~$1.3B. Corpay Inc: To acquire UK-based Alpha Group for $2.2B, expanding into investment fund client segment. CoStar Group Inc: Raised annual revenue forecast (now $3.14–$3.16B) due to strong traffic and 65% quarterly jump in net new bookings. Dassault Aviation: Raised concerns about the future of a trilateral fighter jet project due to disputes with Airbus over program control. Delta Air Lines Inc: Facing scrutiny from U.S. senators over potential AI-driven ticket pricing. Denies using personal data for individualized fares. Enphase Energy Inc: Forecast Q3 revenue of $330M–$370M, missing expectations. Q2 profit beat estimates despite gross margin pressure from Trump-era tariffs. Equinor ASA: Q2 pre-tax profit dropped 13% YoY to $6.54B, in line with expectations. Maintains 2025 production and capex guidance. EQT Corp: Q2 profit beat, raised production forecast to 2,300–2,400 Bcfe from 2,200–2,300. Benefits from higher gas prices and Olympus Energy acquisition. Ford Motor Co: Industry group opposes Japan trade deal that lowers tariffs while maintaining higher ones on Canadian/Mexican autos. Galaxy Digital Holdings Ltd: Jefferies initiates with a 'Buy' rating, $35 target; sees upside from crypto regulation and AI data center demand. General Motors Co: Concerned about trade deal that gives Japan a tariff advantage over North American automakers. Hilton Worldwide Holdings Inc: Raised full-year adjusted profit forecast to $7.83–$8/share, from $7.76–$7.94. Q2 EPS rose to $2.20 from $1.91. Infosys Ltd: Narrowed annual growth forecast to 1%–3%. Q1 sales rose 7.5% to $4.89B; net profit rose 8.7% to 69.21B rupees. Intuitive Surgical Inc: Beat Q2 estimates with EPS of $2.19 (vs. $1.92 expected); lifted gross margin forecast and expects lower tariff impact. Jefferies raised target to $550 (from $530). Lockheed Martin Corp: Jefferies cut target to $460 from $500 after a $1.6B pretax loss tied to a classified aeronautics program. Microsoft Corp: Initial SharePoint patch failed to fix major vulnerability exploited by Chinese groups. Released additional patches afterward. Morgan Stanley: Under FINRA investigation for weak AML client screening across its wealth and institutional units. PayPal Holdings Inc: Launched PayPal World for cross-border payments, in partnership with India's UPI, Mercado Pago, Tenpay Global, and Venmo. SAP SE: Q2 sales and earnings rose, but stock fell as SAP kept FY guidance unchanged. Free cash flow jumped 83% to €2.36B, beating expectations. TE Connectivity PLC: Beat Q3 estimates and issued upbeat Q4 guidance. Tariff impact was half of expected (1.5% vs. 3%). Forecast Q4 revenue ~$4.55B. Texas Instruments Inc: Q3 guidance missed expectations. Cited tariff/geopolitical issues. Jefferies raised price target to $185 from $155. UniCredit (Italy): Withdrew €15B bid for Banco BPM, blaming government interference. Vale SA: Q2 iron ore output rose 3.7% to 83.6M tons. Sales fell 3.1% YoY, but strong performance from S11D and Brucutu mines supports 2025 goals. Woodside Energy Group Ltd: Q2 revenue rose 8% to $3.28B, helped by Senegal's Sangomar project. Took write-downs on hydrogen and old offshore assets. Lowered production costs to $8–$8.50/boe.
Globe and Mail
27 minutes ago
- Globe and Mail
EU heading toward 15% tariff deal with Washington, diplomats say
The European Union is heading toward a trade deal with Washington that would result in a broad 15-per-cent tariff on EU goods imported into the U.S., avoiding a harsher 30-per-cent levy slated to be implemented from Aug. 1, two EU diplomats said on Wednesday. The rate, which could also extend to cars, would mirror the framework agreement the United States struck with Japan. Officials from the European Commission, which negotiates trade deals on behalf of the 27-nation bloc, briefed EU envoys on the state of talks with their U.S. counterparts. U.S. President Donald Trump would ultimately make any final decision on a deal, however. Under the outlines of the potential deal, the 15-per-cent rate could apply to sectors including cars and pharmaceuticals and would not be added to long-standing U.S. duties, which average just under 5 per cent. There could also be concessions for sectors like aircraft, lumber as well as some medicines and agricultural products, which would not face tariffs, the diplomats said. Washington does not, however, appear willing to lower its current 50-per-cent tariff on steel, they said. The Commission said earlier on Wednesday that its primary focus was to achieve a negotiated outcome to avert the threatened 30-per-cent tariffs. At the same time it planned to submit counter-tariffs on €93-billion ($174.5-billion) worth of U.S. goods to EU members for approval. A vote is expected on Thursday, though no measures would be imposed until August 7. Germany supported the EU readying countermeasures, a government representative said. If Trump's 30-per-cent tariffs are implemented, EU diplomats also said there was broad support among European governments to activate wide-ranging so-called'anti-coercion' measures, which would allow the bloc to target U.S. services and other sectors. The EU appears to be following in the footsteps of Japan, whose agreement with the United States is the most significant Trump has struck since launching his tariff offensive in April. European shares climbed around 1 per cent, led by automobile stocks, following the U.S.-Japan announcement. One stand-out feature of that deal was that the same 15% rate applies to cars, compared to the current U.S. tariff of 27.5 per cent, something the EU may want for its own auto exports. The U.S. imported vehicles and automotive parts valued at more than US$55-billion from Japan last year. EU exports were €47.3-billion ($75.7-billion). Far fewer U.S. cars were sold into the EU or Japanese markets. EU officials say Washington has shown little sign of budging on car tariffs, but the Japan deal could hint at flexibility. 'Whatever the Japanese got will become the minimum for the EU negotiating objectives,' said Simon Evenett, professor of geopolitics and strategy at IMD Business School.
Globe and Mail
27 minutes ago
- Globe and Mail
Palantir's Current Valuation: Stretched or Fully Justified?
Palantir Technologies PLTR has emerged as one of the most talked-about names in the S&P 500, and not just for what it does, but for what investors are willing to pay for it. With a market capitalization of $358 billion, it now surpasses giants like Coca-Cola and Bank of America. Yet, when viewed through a valuation lens, Palantir stands alone in its league. Its trailing 12-month price-to-earnings ratio exceeds 640X, and its forward 12-month multiple hovers above 225X. Even more striking is its enterprise value relative to forward 12-month revenue of more than 78X, a level rarely seen, even during the most exuberant periods in market history. By that metric, Palantir looks far more expensive than nearly every other established U.S. stock over the past two decades. Such elevated valuations raise the bar for future performance. For a company trading at these levels, expectations around revenue acceleration, margin expansion, and long-term scalability must not only be met; they must be exceeded. Even minor disappointments can trigger sharp corrections as multiples revert toward historical norms. Companies in the past that reached these kinds of revenue multiples — often 30x or higher — eventually faced tough questions about sustainability. Investor optimism alone is rarely enough to sustain prices when fundamentals don't keep up. The pattern is hard to ignore. When companies reach 30x sales or more, they often enter what is viewed as the 'bubble zone,' a place where expectations are sky-high and hard to maintain. Revenue growth typically slows, forecasts get downgraded and valuations eventually compress. In the short term, momentum can mask this risk, but over time, gravity tends to take hold. In conclusion, Palantir's valuation not only defies market norms but also places it well beyond even the exuberance seen in past bubbles. Unless its performance can defy history, the risk of multiple compression looms large. Investors should tread carefully. Stable Defense Alternatives to Palantir As PLTR's valuation moves higher, Lockheed Martin LMT and RTX Corporation RTX offer more grounded defense exposure. Lockheed Martin, with its massive defense contracts, provides steady cash flow and less volatility than PLTR. Its trailing 12-month price-to-earnings ratio is below 18X, and its forward 12-month multiple is just above 14X. Lockheed Martin continues to benefit from global rearmament while trading at modest earnings multiples. Similarly, RTX shines through missile systems. RTX's defense backlog, like LMT's, underscores its stability. Its trailing 12-month price-to-earnings ratio is below 44X, and its forward 12-month multiple is just above 23X. PLTR's Price Performance, Estimates The stock has surged a whopping 97% year to date, significantly outperforming the industry 's 19% rally. The Zacks Consensus Estimate for PLTR's earnings has remained unchanged over the past 30 days. PLTR stock currently carries a Zacks Rank #5 (Strong Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%. Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. Today, See These 5 Potential Home Runs >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lockheed Martin Corporation (LMT): Free Stock Analysis Report RTX Corporation (RTX): Free Stock Analysis Report Palantir Technologies Inc. (PLTR): Free Stock Analysis Report
