Skip to content

Key takeaways

  1. Ethereum expanded upon Bitcoin’s design to create a versatile platform for decentralized applications, enabling a comprehensive decentralized economy.
  2. The introduction of the Ethereum Virtual Machine and smart contracts has revolutionized app development, making Ethereum the foundation for a diverse array of decentralized applications across various sectors.
  3. Ethereum’s extensive developer community and its leading role in sectors like decentralized finance (DeFi), non-fungible tokens (NFTs), and gaming, highlight its significant impact on the decentralized digital economy and its position at the forefront of Web3 innovation.

to explore:

  • Improving on the Bitcoin model
  • Building on top of Ethereum
  • Ethereum’s explosive growth
  • A vibrant, diversified protocol economy

Ethereum has profoundly reshaped the decentralized economy by expanding on the Bitcoin model and offering a versatile platform for decentralized applications. Its unique combination of a native peer-to-peer payment network, a common developer toolkit, and a virtual machine for executing smart contracts has set a new standard for blockchain technology. Ethereum’s ability to attract a robust developer community and support a diverse array of dApps across sectors like DeFi, NFTs, and gaming underscores its role as the leading blockchain network. Despite challenges such as scalability, Ethereum’s innovative solutions and continued evolution position it at the forefront of Web3, driving significant economic activity and technological advancement in the decentralized digital landscape.

WHAT ARE THE RISKS?

All investments involve risks, including possible loss of principal.

Blockchain and cryptocurrency investments are subject to various risks, including inability to develop digital asset applications or to capitalize on those applications, theft, loss, or destruction of cryptographic keys, the possibility that digital asset technologies may never be fully implemented, cybersecurity risk, conflicting intellectual property claims, and inconsistent and changing regulations. Speculative trading in bitcoins and other forms of cryptocurrencies, many of which have exhibited extreme price volatility, carries significant risk; an investor can lose the entire amount of their investment. Blockchain technology is a new and relatively untested technology and may never be implemented to a scale that provides identifiable benefits. If a cryptocurrency is deemed a security, it may be deemed to violate federal securities laws. There may be a limited or no secondary market for cryptocurrencies.

Digital assets are subject to risks relating to immature and rapidly developing technology, security vulnerabilities of this technology, (such as theft, loss, or destruction of cryptographic keys), conflicting intellectual property claims, credit risk of digital asset exchanges, regulatory uncertainty, high volatility in their value/price, unclear acceptance by users and global marketplaces, and manipulation or fraud. Portfolio managers, service providers to the portfolios and other market participants increasingly depend on complex information technology and communications systems to conduct business functions. These systems are subject to a number of different threats or risks that could adversely affect the portfolio and their investors, despite the efforts of the portfolio managers and service providers to adopt technologies, processes and practices intended to mitigate these risks and protect the security of their computer systems, software, networks and other technology assets, as well as the confidentiality, integrity and availability of information belonging to the portfolios and their investors.

Any companies and/or case studies referenced herein are used solely for illustrative purposes; any investment may or may not be currently held by any portfolio advised by Franklin Templeton. The information provided is not a recommendation or individual investment advice for any particular security, strategy, or investment product and is not an indication of the trading intent of any Franklin Templeton managed portfolio.

Important Legal Information

This document is for information only and does not constitute investment advice or a recommendation and was prepared without regard to the specific objectives, financial situation or needs of any particular person who may receive it. This document may not be reproduced, distributed or published without prior written permission from Franklin Templeton.

Any research and analysis contained in this document has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Although information has been obtained from sources that Franklin Templeton believes to be reliable, no guarantee can be given as to its accuracy and such information may be incomplete or condensed and may be subject to change at any time without notice. Any views expressed are the views of the fund manager as of the date of this document and do not constitute investment advice. The underlying assumptions and these views are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. 

There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized. Franklin Templeton accepts no liability whatsoever for any direct or indirect consequential loss arising from the use of any information, opinion or estimate herein.

The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not necessarily indicative nor a guarantee of future performance.

Copyright© 2025 Franklin Templeton. All rights reserved. Issued by Templeton Asset Management Ltd. Registration Number (UEN) 199205211E.

CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.