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Crypto prices may have taken a beating over the last several months, but that doesn't mean it's a bad time to invest.

In fact, this downturn can actually be one of the best times to buy, because it's an opportunity to invest in expensive cryptocurrencies at a discount. While nobody knows for certain how long this slump will last, there's one investment I'm stocking up on before fall: Ethereum (ETH -1.41%).

The price of Ethereum has been rebounding in recent weeks, largely due to positive news about its upcoming update, "The Merge."

This upgrade will bring the network one step closer to a proof of stake (PoS) system, shifting away from its older, energy-intensive proof of work (PoW) mining protocol. Developers recently set a tentative date of Sept. 19 for the rollout, which has many investors feeling optimistic about Ethereum's future.

The move to PoS brings a slew of benefits for Ethereum. Not only is PoS far more energy efficient than PoW, but it will also speed up transaction times significantly and bring down transaction costs for users.

Right now, Ethereum can process around 15 transactions per second. Once its update is completed, however, it could potentially handle up to 100,000 transactions per second.Speed like that will allow Ethereum to scale, and it will also help it compete with smaller, faster networks like Solana and Cardano.

Ethereum could be on the verge of serious growth after its update this fall, but there are still a few risks to think about before you invest.

For one, Ethereum -- like all cryptocurrencies -- is still a speculative investment right now. Nobody knows for sure whether crypto will stick around for the long term. Even if it does, it's uncertain which individual cryptocurrencies will succeed.

Also, it's likely Ethereum will see more volatility as it grows. Updates can sometimes be rocky, and if the network experiences any bugs or setbacks with The Merge, it could result in turbulence in the market. Before you invest, be sure you're prepared to weather more potential volatility as Ethereum continues to find its footing.

Ethereum is one of the strongest players in the crypto space right now. It's the second-largest cryptocurrency behind Bitcoin, and it's also the most popular network for decentralized applications. The Merge will add to its many advantages, making it an even stronger investment.

However, crypto is still risky. Before you buy, consider how much volatility you can withstand, and think about whether you're willing to invest in something that may or may not succeed over time. And if you do choose to buy, only invest money you can afford to lose.

The coming months are promising for Ethereum as it gets closer to its upgrade, so right now could be a smart time to buy. Just be sure you've considered the risks so that you're as prepared as possible -- regardless of what happens with the crypto market.

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

Excerpt from:
Here's My Top Cryptocurrency to Buy Before Fall - The Motley Fool