Could Buying Ethereum Today Set You Up for a 20X Return? One Top Bank Thinks So

Ethereum (CRYPTO: ETH) is the world's largest cryptocurrency after Bitcoin, with a market cap of around $237 billion. While it's nowhere near the $1.4 trillion that Bitcoin is valued at, it has firmly established itself as one of the leading cryptocurrencies over the years.

This year, however, the crypto markets have been struggling. There hasn't been as much appetite for risk and speculation when it comes to crypto, and there have been some significant declines across the board. Bitcoin is down 19% this year, and Ethereum has fallen even further, tumbling around 34% thus far.

Buying Ethereum while it's low, however, could potentially set you up for some much larger gains down the road. One top bank believes it may even generate 20x returns.

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Ethereum to hit $40,000 by the end of the decade?

Although Ethereum is struggling to stay above $2,000 these days, Standard Chartered projects that by the end of the year, it'll double and hit $4,000. And by the end of the decade, it believes that Ethereum will hit $40,000. That means buying the cryptocurrency today would mean your investment could grow to 20 times its value in about four years.

A big reason the top bank expects so much upside for Ethereum is its importance in the growing stablecoin market, which analysts believe can achieve sixfold growth by just the end of 2028. Ethereum, which has more than 50% market share of the entire stablecoin market, can stand to benefit significantly from such developments, as well as the growing opportunities in decentralized finance.

Has Ethereum become too cheap to pass up?

Ethereum has some promising opportunities in the crypto market, and with it being just a fraction of Bitcoin's value, it's not hard to make a bullish case for why it should go higher. However, a lot inevitably depends on the growing popularity of stablecoins and the global acceptance of crypto in general. The U.S. has been moving forward with crypto reform, and there's hope the Clarity Act will pass in the near future, which would be a key piece of legislation for crypto as a whole.

There are, however, always going to be risks when it comes to cryptocurrencies. Their valuations are speculative, and that can make them highly volatile investments. Ethereum may look cheap compared to Bitcoin, but determining how large it should be relative to the leading cryptocurrency is not easy.

Ethereum does have some enticing long-term potential, and it may be worth buying the cryptocurrency, but only if you're willing to hang on for years and accept the high risk and volatility that comes with this type of investment.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool recommends Standard Chartered Plc. The Motley Fool has a disclosure policy.