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If you invested $300 in Ethereum five years ago, this is how much you would have today

Ethereum’s price has been highly volatile over the years, but patient shareholders have led the way.

Ethereum (ETH 0.19%) prices have historically proven to be very volatile. It is not unusual for its value to double or triple within a few months. However, in other months the price is halved or worse.

But what about the long term? If you had invested $300 in Ethereum five years ago and held on, you would probably be very happy with the outcome.

How profitable has Ethereum been over the past five years?

If you had put $300 into Ethereum five years ago, you would have about $5,600 today. That’s a return of 1,770%, even higher Bitcoin‘s 1,000% performance over the same period. The S&P500By comparison: increased in value by only 87%.

But before you jump in and buy Ethereum, there are a few important caveats you should make.

First of all, Ethereum was still a young, relatively unknown technology five years ago. The crypto industry has come a long way since then, with much greater utility, adoption and recognition. It’s possible that Ethereum’s biggest growth days are behind it.

Second, these eye-popping returns were only achieved by investors with so-called diamond hands – that’s crypto terminology for holding up through extreme ups and downs. If you bought Ethereum five years ago to sell it in early 2023, for example, you would only be sitting on a 640% gain. That’s still impressive, but far less than what patient investors have earned. Conversely, if you were to buy Ethereum in early 2022 only to sell it a year later, you would have lost two-thirds of your original investment!

Ethereum has proven to be a great long-term investment, but its short-term movements are difficult to predict.

Ryan Vanzo has positions in Bitcoin and Ethereum. The Motley Fool has positions in and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy.