1 of the Best Cryptocurrencies to Buy Right Now

Crypto is soaring. The market is up about 35% in November, with Bitcoin leading the charge, adding billions to its market cap and reigniting enthusiasm across the board. While Bitcoin is a fantastic investment for those with a long-term horizon, the current market conditions present a timely opportunity for another standout cryptocurrency: Ethereum (CRYPTO:ETH).

Here are three reasons Ethereum is one of the best cryptocurrencies to buy today.

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1. Ethereum has underperformed the broader crypto market

This year, Ethereum has significantly lagged behind its peers. Bitcoin has surged almost 110%, and Solana has more than doubled, climbing about 120%. Meanwhile, Ethereum is up just 45% year to date -- and as recently as October, it had risen just a mere 5% in 2024.

This relative underperformance, however, is precisely what makes Ethereum so compelling now. With its price still 30% below its all-time high, Ethereum offers substantial upside potential. If momentum continues and the market dynamics align, Ethereum could break through its previous highs, offering attractive returns for investors willing to give Ethereum another chance.

2. Ethereum's struggles stem from predictable market dynamics

Ethereum's underwhelming performance isn't without reason, but the factors behind it may actually signal future strength.

First, this underperformance is not unusual. Historically, Ethereum and other altcoins tend to bleed value relative to Bitcoin during years when Bitcoin undergoes a halving. The reduction in Bitcoin's inflation rate during these cycles often draws disproportionate attention and capital.

Second, Ethereum's recent struggles also stem from the growing adoption of Layer 2 (L2) scaling solutions like Arbitrum, Optimism, and Base. While these L2s rely on Ethereum's blockchain for security, they bypass some usage fees by bundling multiple transactions into a single "blob" published on Ethereum's network. This has resulted in reduced fees paid to the Ethereum network, cutting the amount of Ether coins burned -- a mechanism crucial for maintaining a deflationary supply dynamic.

As a result, Ethereum has shifted into a temporary inflationary state, with supply increasing slightly during the past few months. But this pattern appears to be reversing. Network activity is climbing, transaction volume is increasing, and to the appreciation of holders, Ethereum's burn mechanism could subsequently kick into gear.

3. Catalysts are aligning for Ethereum's resurgence

The final and perhaps most compelling reason to consider Ethereum is the imminent shift in market dynamics.

As Bitcoin's rally cools, altcoins, including Ethereum, are likely to step into the spotlight. Ethereum, as the most valuable altcoin, stands to benefit significantly from this transition. Increased activity across its ecosystem, driven by decentralized finance (DeFi) and Layer 2 adoption, could further increase transaction fees, amplify the Ether burn rate, and create a positive feedback loop that drives up its price.

An altcoin rally isn't a question of "if" but "when." Capital historically rotates from Bitcoin into Ethereum and other cryptocurrencies as market cycles progress, and Ethereum's expansive ecosystem makes it a prime beneficiary.

This shift may take time, with historical trends suggesting Q1 2025 as a potential turning point. However, Ethereum's robust fundamentals, proven use case, and current price levels make it an excellent buy today for long-term investors.

It's time to give Ethereum a chance

Ethereum may not have delivered the explosive gains of Bitcoin or Solana this year, but its long-term potential remains undeniable. While its price recovery might take longer than some investors hope, the cryptocurrency's deflationary mechanism, diverse ecosystem, and market position make it a compelling choice for those with patience.

If you're looking for a cryptocurrency with strong fundamentals and significant upside, Ethereum is hard to beat. Sooner rather than later, Ethereum's time will come -- and buying at today's levels could prove rewarding.

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RJ Fulton has positions in Bitcoin, Ethereum, and Solana. The Motley Fool has positions in and recommends Bitcoin, Ethereum, and Solana. The Motley Fool has a disclosure policy.