Ethereum

3 Ethereum Investment Strategies You Need to Know

ethereum

ethereum and bitcoin have become household names when it comes to cryptocurrencies. while they are often mentioned in pairs, they are far from similar. while bitcoin was created as an alternative and decentralized currency. ethereum on the other has a bigger goal. intends to create a software platform that not only favors cryptocurrencies but any type of decentralized application that can be run without the need for a third party. Ether is one of the most popular cryptocurrencies, however, many people still have a dilemma on how to invest their money in Ethereum or if it is a smart option to do so.

Reading: Ethereum investment strategy

If you have been thinking about investing in Ethereum, then this article is your blessing in disguise. so read on!

what is ethereum?

ethereum is an open source decentralized platform network. the ethereum network works like the bitcoin network. this means that it is built on top of blockchain technology. is a digital public ledger where financial agreements can be evaluated. then they are stored by software, without the intervention of a third party.

The easiest way to think of the ethereum network is as a secure database that anyone can access. in this system new data blocks are added. furthermore, they are cryptographically “chained” to the parent block, effectively creating a non-editable record of previous changes. ethereum is considered one of the largest cryptocurrencies because ether is the second largest cryptocurrency after bitcoin by market cap.

What makes ethereum so exciting for users and fans alike is the network’s potential to do more than just handle financial transactions. Ethereum takes the bitcoin blockchain further by allowing developers to run programs (known as “smart contracts”) that can host any aspect of decentralized applications. (known as “dapps”). People have created and launched a variety of dapps on ethereum, including blockchain games, digital art marketplaces (or nfts), and decentralized finance (defi) apps.

However, there are also some downsides to this system, the decentralized system can lead to more anonymity for users. Furthermore, it can also result in less control and censorship by third parties, including corporations and governments.

See also: Decentralized identity | ethereum.org

why should i invest in ethereum?

ethereum could be one of the most successful cryptocurrencies in the coming years. experienced explosive progress, with its price increasing by more than 1,000% in the last 12 months. (as of September 2021). While cryptocurrency prices have plummeted in recent weeks, that doesn’t necessarily mean this is the wrong time to buy. recessions can offer a great alternative to investing when prices are lower.

Keeping in mind that ethereum is one of the highest priced cryptocurrencies, right now might be a good time to buy when it’s “on sale”. we mean, come on, when have indians bought something when it’s not on sale anyway?

Another reason why you should consider buying ethereum during this time is that the upcoming ethereum 2.0 could give the coin a competitive edge. Tesla CEO Elon Musk recently announced that the company will no longer accept bitcoin as a form of payment due to the impact it leaves on the environment. this announcement was one of the factors behind the most recent crypto crash. as it made investors wonder if the cryptocurrency could thrive in the long run.

However, ethereum is taking steps to make the technology more energy efficient. just to clear up the confusion, ethereum is the name of the blockchain technology, while ether is the token that is hosted on that blockchain. Ethereum 2.0 is an updated version of the blockchain due to be rolled out later this year or early next, and claims to use 99.95% less energy than current technology. On top of this, the ethereum blockchain has more utility in real life, giving it an edge in surviving in the long run.

investment strategies to invest in ethereum

#1 sips

Several financial experts suspect that after taking into account all the risks and volatility, sipping may be a preferred route to building wealth through cryptocurrencies for first-time investors. as expressed by dr. Vinay Asthana, Associate Professor at Alliance Business School in an interview with Faith Online, “The key advantage of a systematic investment plan (SIP) is that the issue of timing the market becomes irrelevant.” profitable strategy due to market volatility.

See also: 7 Best Ethereum Casinos 2022 [Reviewed & Rated]

dollar cost averaging #2

This is a strategy where an investor invests the entire amount of money in small increments over time rather than all at once. the goal is to take advantage of market declines without risking too much capital at any given time.

dca is formulated to help offset any negative effects on an investment induced by short-term market volatility. If the price of an asset falls when you are dollar cost averaging, then you can make a profit if the price rises again. If you’re not already very familiar with cryptocurrencies, dollar cost averaging can save you the effort of trying to time the market for the best stock prices.

trade #3

Cryptocurrency trading is the act of speculating on the price movements of cryptocurrencies through a CFD trading account, or buying and selling the underlying currencies through an exchange. however, this strategy requires a lot of experience and we would not recommend it for novice investors.

Cfd trading is derivatives, allowing you to speculate on the price movements of cryptocurrencies without having to take ownership of the underlying currencies. depending on your understanding of the market. you can choose to go long (“buy”) if you think a cryptocurrency will rise in value, or short (“sell”) if you think it will fall.

conclusion

Although investing in cryptocurrencies may not be to everyone’s taste, it is one of those industries that helps you make huge profits if handled correctly. The above strategies can help you start your investment journey in the crypto industry as most of them are considered to be “safe” however any other blockchain based currency is highly volatile and always subject to market risk. . one should always handle such investments with caution.

See also: How Long Does It Take to Mine 1 Ethereum? – Aquila Style

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