Investing in Ethereum is very promising, given the bullish outlook. The cryptocurrency market has remained resilient over the past months despite fears over selling pressure and a price crash, meaning that investors have reacted to the Shanghai upgrade differently from what was expected. The price of Ethereum must, however, make a decisive move to kickstart a long-term bullish trend reversal. You can buy a fundamentally sound asset, but the decision is up to you. We’ve seen that Ethereum has received positive media exposure over the past couple of weeks, so the impact of the Shanghai upgrade wasn’t reflected in the economics.
- Buy Ethereum Through an Exchange
If you’re curious to know where to buy Ethereum, there are several options, depending on your preferences and location. Your best bet is to purchase Ethereum through an exchange, which features its own storage facilities. In case you didn’t already know, cryptocurrency exchanges fall into two categories: centralized and decentralized. A centralized exchange requires you to verify your identity and connect a payment method, such as a bank account or debit/credit card. On the other hand, a decentralized exchange allows you to buy Ethereum directly from the seller; there’s no intermediary or custodian. Peer-to-peer trading, as it’s called, enables users to enforce smart contracts.
Cryptocurrency exchanges have certain defining characteristics, such as little to no measures to collect information about their customers, several cryptocurrencies listed, a user-friendly interface, and robust information to help users increase their level of understanding. Increased regulation translates into the fact that cryptocurrency exchanges are far more professional now than they were when they first launched. The smart contract is encoded in the blockchain, so it can’t be tampered with. Smart contracts usually use the Ethereum blockchain, but Bitcoin can support trustless, self-executing agreements too. You’re required to pay two types of fees: network fees and trading fees.
- Understand What Affects Ethereum Price
The price allows you to understand whether buyers or sellers are dominant in the cryptocurrency market and what a fair Ethereum price is at any time. You’ll want to trade on more established platforms, as the prices aren’t so much affected by large orders (or manipulation). Apart from standard metrics like price and trade volume, it’s crucial to understand how investors communicate market sentiment. For example, search engine traffic or social media activity can offer an indication of the Ethereum price rising or falling. Learning what makes Ethereum’s value increase or decrease will help you adapt your strategy and decide whether to buy or sell.
Ethereum’s price is dependent on the interaction between the supply and demand components of the cryptocurrency market. An exchange occurs when buyers and sellers can agree upon a price. Ethereum as a digital asset is scarce, independent of any government, so it’s an appealing option for investors looking to diversify their portfolios or protect their wealth. Ultimately, the price of Ethereum is determined by the collective actions and decisions of countless cryptocurrency market participants, who have different expectations, preferences, and motivations. There’s an expectation of an increase on account of the updates to the Ethereum network that will progress throughout the year.
- Have A Digital Wallet to Hold Ethereum
When you open an account at a cryptocurrency exchange, a wallet is automatically created for you so that you can manage your funds directly from your web browser. You can send and receive Ethereum using private and public keys. Attention must be paid to the fact that the wallet is owned and controlled by the exchange. You can transfer your crypto holdings from the exchange to a wallet if you want to have more control over them. The crypto wallet doesn’t contain any coins, meaning that it simply provides a means to prove you have ownership of digital assets. It also allows you to interact with different decentralized applications.
Your wallet must be compatible with the cryptocurrency you choose. Not all wallets support Ethereum, so find one that does. All leading crypto wallets offer a high level of security, therefore, safeguarding your assets, but that doesn’t mean that you should be carefree. Store the bulk of your digital assets using cold storage methods, and never ever share your login details. A cold wallet is one that’s not connected to the Internet; to access it, you need the security keys associated with it. If you want to liquidate some of the Ethereum in your cold wallet, all you have to do is plug it into your computer and direct your wallet to send a coin to your exchange wallet address.
- Rely On Dollar-Cost-Averaging
Fractional purchases are possible, which means you don’t have to buy an entire coin. You can buy as little as 0.000000000000000001 Ethereum when the price is too high, making it easier to invest. Similar to other cryptocurrencies, Ethereum’s native token is divisible. Speaking of which, it’s recommended to invest small amounts of money to minimize the potential consequences of volatility. More precisely, you can invest a certain amount at the beginning of each month to avoid the varying values. It’s a time-honored investment strategy that enables you to reduce your average purchase price and take some of the emotion out of the investment decisions.
By regularly buying Ethereum, you’ll be investing more over time, regardless of what’s happening in the cryptocurrency market. When Ethereum’s price goes up, you’re in for a win because you’ve lowered the cost to acquire your holdings. Determine how much in discretionary income you have to commit to investing, and, whatever you do, don’t exceed that figure. Every investment strategy has its pros and cons, and the same goes for dollar-cost-averaging. To be more precise, you may forfeit higher returns. If the cryptocurrency market goes up while you’re dollar-cost-averaging, you’ll miss out on potential gains.
Conclusion
The market position of Ethereum seems to be strong, which is encouraging for investors. Even though Ethereum costs $1,855.40, you can buy a small portion for $5 or $10. As with any investment, there’s no guarantee of future returns, and the cryptocurrency market tends to be volatile.