Ethereum (Ether) is a blockchain platform with its own cryptocurrency and a programming language called Solidity. However, when discussing cryptocurrency, Bitcoin has the most value.
Ethereum, on the other hand, is right there with it in terms of competition, with a market value of over $232 billion, making it the second-largest type of cryptocurrency.
As of May 2021, Ethereum is second in market value only to Bitcoin. Therefore, Ether is a profitable investment choice.
So a $1,000 investment done in Ethereum in 2015 would value up to $2.23 million six years later.
What Is Ethereum?
In late 2013, Vitalik Burerin, a cryptocurrency researcher and programmer, developed Ethereum, enabling developers to build and publish smart contracts and distributed applications.
In simple English, Ethereum is a system on the internet where people make deals. Ether is the type of app that uses the Ethereum system to ensure every person gets the right amount in every exchange.
Investing In Cryptocurrency
Investing in cryptocurrency is a gamble. And we say that because of their vulnerability to price fluctuations.
Several external factors can contribute to this price fluctuation. For example, when Elon Musk tweeted that Telsa would no longer accept Bitcoin as payment, the coin's value plummeted by 15%.
However, every day is not the same; whenever there is a dip in value, there is a counter bump by those trying to capitalize. Hence, Bitcoin is still on track to surpass its all-time high of $60,000 by the end of 2021.
Keeping history in mind, Ether has also had some significant gains, but it has suffered from some big drawbacks too.
For example, it dropped from about $4,000 per coin in May 2012 to less than $1800 in less than a month.
If you bought it at its peak only to discover that its value has dropped by more than half in less than 30 days, that should surprise everyone. But as mentioned, there will always be a climb.
For instance, in 2017, digital currencies had a total market value of approximately $100 billion, and today they are worth almost $2 trillion.
According to the market cap, the price of these currencies can surpass ten times that of the most profitable global organizations.
The Statistics Behind Ethereum
Ethereum started under $1, and within a year, the price reached $1448. This high price can be primarily attributed to the ICO boom and was profitable for early investors.
Moreover, the price of ETH has increased by 436%; at the beginning of 2021, Ethereum's price was $735.34, and today, it is traded at $3,938.47.
By the end of this year, the price is predicted to go up to $5750. Additionally, the year-to-year change will be at +682%.
Peering into the future, we can predict 2022 to start with a drop as the price will decrease to $5370. However, in the second half, the price would increase to $6981, adding $1611 to the year start number.
Keeping the ups and downs of the cryptocurrency market in mind, one needs to keep a checklist before investing or buying Ethereum.
No matter how much you have in liquid assets, you should always spend wisely. The same is the case when investing in Ethereum.
Make sure there are adequate emergency cash savings. If things go south, one has to cover their tracks and ensure that there is a plan B.
As mentioned, cryptocurrency investment is a volatile business. However, with such high rewards, it is worth taking the risk.
How Does Ethereum Fit The Profile
When it comes to investing, be sure your profile has the place for cryptocurrency. Do not try imposing something where it is not required.
Be sure that the long-term portfolio is in place before investing in ETH. If you have a highly diversified, balanced portfolio, this cryptocurrency could offer even more diversification.
The performance of cryptocurrency usually doesn't correlate with the stock market's performance. If the stock market dips, that does not mean the crypto market will go downhill as well.
Requirements For Buying And Holding ETH
On a basic level, there are two requirements for buying and holding Ethereum:
- An exchange: Buy crypto with US dollars or trade one cryptocurrency for another
- An ETH wallet: The currency is digitally stored here. This wallet also has a public address that is used to send or receive ETH
Things To Consider When Buying Ethereum
Buying Ethereum is no rocket science; it is easy as long as one knows all about the whereabouts. Here is how to buy ETH and things to keep in mind:
Level Of Risk
Cryptocurrencies are vulnerable to price inflations. As a result, experts recommended not to invest more than what you can afford to lose in crypto.
Make sure you do your homework before buying to know all about the predictions regarding the crypto market.
Pick A Crypto Exchange
Buying stocks and buying Ether is not the same; cryptocurrencies aren't traded on major exchanges like American Stock Exchange. Therefore, it is a tad bit more complex than buying stocks.
To go through with it, an account on a crypto exchange like Coinbase or FTX is required to buy crypto. And when choosing an exchange, ensure to check that it offers a crypto wallet.
You need to have funds in your account to purchase Ethereum. Hence make sure to look into the fees of the crypto exchange when securing a funding source.
Remember, the conversion rate varies; for example, wire transfers are free on Gemini, but debit card transactions are charged a 3.49% fee.
On the other hand, some platforms provide the option of paying with credit cards, and as appealing as that offer sounds, it all boils down to the card.
This is because there are higher interest rates and cash advance costs in addition to the crypto exchange fee. Lastly, be 100% sure of the platform you pick and be mindful of its terms and conditions.
Cryptocurrencies such as Ethereum are decentralized and can be purchased and exchanged at any time.
How do I get ETH? First, in your exchange's "buy" area, enter its ticker symbol ETH and the amount you want to buy.
If you don't want to purchase the entire Ethereum token or don't have enough money to buy a complete coin, you may always buy a fraction of one.
After the transaction is completed, the ETH must be stored. Even though the platform offers the option to keep it for their customers, some prefer to hold it themselves to avoid theft.
The exchange platforms that provide the storage option insure the holdings, and, in many cases, the majority of the assets are kept offline to prevent theft.
It's a foregone conclusion: Ethereum is extremely popular, currently having over 116 billion coins distributed among investors.
However, not everything trending or in-demand means it is the right thing for everyone. Therefore, the points mentioned above should be considered before buying Ethereum.
Types Of Cryptocurrency
There are different types of cryptocurrency, and each holds a separate value. Some are even used as coupons for goods and services.
Read on as we discuss the more popular ones:
Bitcoin is cash for the internet. Currently, there are more than 18 million Bitcoin tokens in circulation.
How does Bitcoin work? Bitcoin is a computer file stored in the "digital wallet" app on mobiles and computers.
With its value sky-rocketing, it can be used to trade for goods; however, not everyone accepts them yet. But this will soon change because of better privacy and security of transactions.
Bitcoin is the most popular cryptocurrency.
Cardano's purpose is to send and receive digital funds; it identifies management and traceability. Formed by one of the brains behind ETH, it allows investors to upgrade the network in the future.
Cardano's price, as predicted by economywatch.com, will be worth $5-$10 by 2022.
Stellar was created to make money transferring an easy process. And its network is designed to make the process more efficient.
The main aim behind Stellar is to assist developing economies that lack access to traditional banking or investment opportunities.
This coin is used as a utility token for the Binance exchange. This token charges less for transactions and trading fees than the other tokens.
As we speak, the value of this cryptocurrency floats around the $300 mark due to the down market. Furthermore, there's a total of 200 million BNB tokens currently in circulation.
How to buy Binance Coin? It is simple:
- Get a Binance coin wallet
- Locate your BNB address
- Sign up
- Buy BNB
- Withdraw your coins
Cryptocurrencies To Invest In
Done with researching over cryptocurrencies and now want to know the top cryptocurrencies to invest in? The list includes:
- Binance Coin
- USD Coin
There are thousands of different types of cryptocurrencies but not every type is suitable for everyone; hence from all the options, pick the one that fits the criteria.
Learn How To Buy And Sell Cryptocurrencies With An Expert
If you are looking for more in-depth detail or want to buy Ethereum, you may find yourself lacking sufficient knowledge to navigate the space.
And if you've done your research and are still clueless about how to go about it, you can always go on to Superprof and find someone to teach you.
Superprof is a platform meant to link teachers and students. And it has profiles for experts in almost every field.
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