3 Reasons to Buy Ethereum Before January 2026

As I write this (Dec. 27), Ethereum (CRYPTO: ETH) is down almost 12% in the past year. Just four months ago, it set a new high of almost $5,000, but for the last two weeks, it has been trading close to $3,000. Given that analysts at VanEck predict Ethereum could reach $11,800 by 2030, that might make today's price an appealing entry point.

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Here are three reasons to consider buying Ethereum before its price rallies again.

1. Ethereum is the hub for stablecoin and real-world asset tokenization

The idea of real-world asset tokenization -- essentially tokenizing ownership of assets on the blockchain -- came into its own in 2025. That's partly due to legislation that set a framework for stablecoins. It can apply to all kinds of assets, including real estate, art, and bonds. Tokenizing assets takes a lot of the friction out of trading them. It can also make them more accessible to a wider group of investors.

Stablecoins are essentially tokenized forms of traditional currencies, such as the U.S. dollar. The issuer keeps real cash in reserve for every token it issues. Transactions on the blockchain are faster and cost less than traditional forms of payment. As such, stablecoins offer the benefits of blockchain without the volatility of other cryptocurrencies.

If we think of Bitcoin (CRYPTO: BTC) as a bank vault, Ethereum is like an engine room. Ethereum pioneered smart contracts, which are the tiny pieces of blockchain code that enable tokenization. There's over $180 billion in tokenized assets, including stablecoins, on Ethereum, according to rwa.xyz. That's over three-quarters of the distributed assets on all the blockchain networks.

2. JPMorgan Chase is building its money market fund on Ethereum

Tokenization has a lot of potential. McKinsey thinks the market could be worth $2 trillion by 2030. However, it isn't clear how it will evolve. Specifically, whether major financial institutions and payment providers will utilize existing crypto networks like Ethereum or build their own blockchains. We will likely see a combination of both, but the more people build on Ethereum, the stronger the ecosystem will be.

In December, JPMorgan Chase announced the launch of its tokenized money market fund. The My OnChain Net Yield Fund (MONY) tokens are issued on Ethereum, and qualified investors can buy tokens through the Morgan Money platform. Next year will almost certainly bring a swath of similar products. Other institutions may well follow JPMorgan's lead and build on Ethereum.

3. Regulatory clarity will boost Ethereum long-term

Crypto industry leaders had high hopes that market structure legislation would be passed in 2025. The House passed the Clarity Act in the summer, which, among other things, establishes oversight of digital assets and removes some of the uncertainty around what cryptos can and can't do. However, it still needs to pass the Senate, which has its own crypto bill. The Senate Banking Committee is merging the two, and we may see progress in 2026.

Clearer regulation would strengthen cryptocurrency in a number of ways. It allows projects to grow without fear of SEC charges for breaking securities laws. It also opens the way for more institutional investment, a trend that Ethereum has already benefited from. There's over $17 billion in Ethereum exchange-traded funds (ETFs), per Coinglass data.

Indirectly, removing legal or compliance roadblocks could boost the decentralized finance (DeFi) industry. As with tokenized assets, Ethereum is the backbone of DeFi, hosting a large number of applications. Put simply, if clear legislation helps the crypto industry to grow, Ethereum will almost certainly benefit.

Ethereum is still a volatile asset

Sentiment has a significant impact on cryptocurrency prices, and investors are nervous right now. The wave of optimism around a pro-crypto administration in the U.S. and other factors has faded. Unfortunately, it is still early days for cryptocurrency, and that's reflected in its volatility.

There's a lot we don't know about how the industry and technology will evolve. As such, even promising cryptocurrencies like Ethereum should only make up a small portion of your portfolio. While there are good reasons to think it can recover and set new highs in the future, there are no guarantees. Ethereum's price may fall further. Longer-term, other smart-contract cryptocurrencies, such as Solana may take some of its market share.

That said, Ethereum has both staying power and proven use cases. In the decades to come, it has a strong chance of surviving jittery markets and playing a leading role. Even more so if more companies use Ethereum as they integrate blockchain technology into their operations.

JPMorgan Chase is an advertising partner of Motley Fool Money. Emma Newbery has positions in Ethereum and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, JPMorgan Chase, and Solana. The Motley Fool has a disclosure policy.