Is Ethereum a Good Investment? A Contrarian Case for Holding ETH When Everyone Else Is Selling.

Contrarian investments aren't for everyone, but when they pay off, the upside tends to be significant. On that note, the price of Ethereum (CRYPTO: ETH) is trading around $2,500 and remains 47% below its August 2025 all-time high. To say that the coin is a smart investment in a room full of crypto natives would likely elicit an audible groan, as myriad investors have arrived at the very same conclusion, only to buy it and promptly underperform the returns of an index fund for years on end, like over the last five years.

Even before the crypto bear market's bottom in late June of this year, when some of Ethereum's longest-holding evangelists finally capitulated and sold their holdings, the coin's reputation was for being a tough hold. In other words, Ethereum's reputation among crypto natives is, at this point, quite checkered, and the reasons for that are worth knowing. In in fact, they're the fuel for a contrarian investment in the coin, which I believe is still a good way to grow your wealth.

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Ethereum is still home to vastly more DeFi capital than any of its rivals

As the world's largest smart contract blockchain and the second-largest cryptocurrency after Bitcoin, Ethereum seems stuck with recurring problems.

Its gas fees (transaction fees) were once habitually far too high, which irritated users and hampered the chain's adoption. The strategy its leaders developed to address that issue, which was to promote the creation of third-party layer 2 (L2) networks that could handle traffic more cheaply, somewhat backfired. With so much activity shunted off of the main chain to the L2s, Ethereum's fees collapsed.

As the network destroyed some of the fees it charges, the plummeting fees meant that the circulating supply of Ethereum was no longer as constrained as before. That, in turn, caused the coin's supply to flip from slightly deflationary (shrinking over time) to slightly inflationary (expanding over time), as it is today at approximately 0.9% per year.

Consistent strategy and governance have been other issues. In February 2026, Ethereum's co-founder Vitalik Buterin said the original vision for promoting layer 2s to handle traffic no longer made sense, a statement that, while correct, ended up sending the network's ecosystem into disarray overnight. Both of the Ethereum Foundation's co-executive directors stepped down by June 2026.

Furthermore, cybersecurity has been a constant problem. Ethereum suffered $332 million in hack losses in the first half of 2026, the most of any network. Hacks follow capital, and Ethereum has the most of it.

Why Ethereum is still worth buying

Ethereum has a lot of rivals, like Solana, BNB Chain, and Arbitrum, among many others.

Many of those other players, including BNB Chain and Arbitrum, rely on the Ethereum Virtual Machine (EVM), the network's software for executing smart contracts, so Ethereum's choices in its technology and development significantly shape its competitive landscape. Similarly, while the leadership teams of its biggest competitors are competent and ambitious, none have quite the same prestige as Buterin's, especially when it comes to technical matters. It's difficult to overstate how much sway Buterin has as a thought leader in the crypto sector; for years now, technical and financial innovations pioneered and tested on Ethereum have first been deployed widely elsewhere.

Of equal importance to this is that none of Ethereum's peers come anywhere close in terms of the amount of capital in their ecosystems.

Ethereum has $54.1 billion in decentralized finance (DeFi) deposits, vastly more than Solana's $6.6 billion, according to data from DefiLlama. Its $147.3 billion in stablecoins is larger than the combined value of the next nine chains that use its virtual machine. What's more, the chain is home to 43.1% of all tradeable tokenized real-world assets (crypto tokens representing ownership of bonds, funds, and stocks), which were worth $16.9 billion.

It's also the crypto sector's central hub for talent. Its 31,869 active application developers in its ecosystem constitute a much larger concentration of human capital than on any other chain.

That powerful combination of human capital and financial capital is why new types of crypto projects, and indeed entire new emerging segments in crypto, tend to be represented on Ethereum first.

What's the right move?

I think Ethereum is a good investment today, despite its many warts. If anything, its track record of making major changes in response to problems is a good thing, even if it often ends up swapping out one issue for another.

Over the long run, the bumps in the road of these early days will likely be forgotten, and the coin's price will likely be higher even if they aren't.

Alex Carchidi has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool recommends BNB. The Motley Fool has a disclosure policy.