We Have All Heard of Ethereum and Its Potential. What Do We Need to Know Before Investing in It?
2022-05-09 17:18:32
What Should You Know Before Investing In Ethereum?
Ethereum is basically a decentralized computing platform, meaning that it does not run on a single device, but simultaneously on thousands of machines around the world. It allows everyone to transfer digital money, deploy new codes, and interact with many decentralized applications. Ethereum is a protocol, but its currency is simply known as Ether (or ETH). With a market capitalization of around $330 billion, it is the second leading form of cryptocurrencies and the one most used for interacting with smart contracts in the DeFi space. ETH’s value was trading at around $3,000 in April 2022, which is significantly down from November 2021 highs that approached $5,000. In the last few weeks the cryptocurrency market is not going through a positive period, perhaps due to global geopolitical news and economical uncertainty. The trend seems to be bearish and Ether is struggling to maintain its price supports, like almost any other cryptocurrency including bitcoin.
However, most of the time, short-term prices do not necessarily indicate the real value of the assets, especially in the cryptocurrency industry. In the past months, Ethereum has improved greatly in terms of development and adoption. The future transition from the Proof of Work consensus mechanism to the Proof of Stake one, which will give birth to the so-called Ethereum 2.0, could push more people to buy Ethereum and hold it long term. We know that this market still has plenty of room to grow, so it might be a good time to seize opportunities.
Ethereum is basically a decentralized computing platform, meaning that it does not run on a single device, but simultaneously on thousands of machines around the world. It allows everyone to transfer digital money, deploy new codes, and interact with many decentralized applications. Ethereum is a protocol, but its currency is simply known as Ether (or ETH). With a market capitalization of around $330 billion, it is the second leading form of cryptocurrencies and the one most used for interacting with smart contracts in the DeFi space. ETH’s value was trading at around $3,000 in April 2022, which is significantly down from November 2021 highs that approached $5,000. In the last few weeks the cryptocurrency market is not going through a positive period, perhaps due to global geopolitical news and economical uncertainty. The trend seems to be bearish and Ether is struggling to maintain its price supports, like almost any other cryptocurrency including bitcoin.
However, most of the time, short-term prices do not necessarily indicate the real value of the assets, especially in the cryptocurrency industry. In the past months, Ethereum has improved greatly in terms of development and adoption. The future transition from the Proof of Work consensus mechanism to the Proof of Stake one, which will give birth to the so-called Ethereum 2.0, could push more people to buy Ethereum and hold it long term. We know that this market still has plenty of room to grow, so it might be a good time to seize opportunities.
Now That We Have Analyzed the Situation, the Question Is: How Do We Invest in Ethereum?
First of all, it is important to consider your risk tolerance and the general portfolio situation. One of the most common recommendations is that you should never invest more than you can afford to lose. After understanding what Ethereum is, get started by choosing a crypto exchange where you can deposit either fiat currencies or other cryptos. Also make sure the exchange offers a crypto wallet to store your investments. The next step is to open an account: in most of the cases you are asked to provide your details such as name, address, and one of the specified forms of identification. Once the account has been created, you have to fund it by using the various options offered by the exchange. In most cases, it is possible to deposit using a bank transfer or a credit/debit card. However, make sure to review the fees before doing that, as in some exchanges these are quite high. To purchase Ethereum, enter its symbol -ETH- in the ‘buy’ field and type in the amount you want to buy. The market is open 24/7, and you can even buy a small fraction of ETH.How Do I Choose a Reliable Crypto Exchange?
The question, which of the many service providers to rely on when investing in Ethereum, should not be underestimated. First of all, a crypto exchange must be secure and compliant with regulations. Second of all, it must have proven experience in the industry. A great example is Gate.io exchange. They are always attentive to the needs of the users and, thanks to their user-friendly trading interface, they allow you to buy Ethereum in a few simple steps.
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