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Despite witnessing an inauspicious collapse back in 2020, cryptocurrencies are on the rise once again. Ethereum is one of the few digital assets whose prices surged more than 800% over the last year. For instance, ETH had been trading around $352[1] as of October 04, 2020, while it strengthened to $3413 on the same day in 2021. Analysts believe that Ethereum holds massive potential to surpass the $898 Billion market capitalisation of the world’s most popular cryptocurrency – Bitcoin. Therefore, if you wish to make it a part of your investment portfolio, this might be the high time to do so. In this guide, we’ll explain why should you invest in Ethereum in detail.
[1] “Ethereum price today, ETH to USD live, marketcap and chart.” . Accessed 12 Oct. 2021.
Why should you consider investing in Ethereum in 2021
Being an open-source platform for developing decentralised apps, Ethereum tends to be more promising amid real-world utilisation and value storage. After undergoing recent upgrades, the scalability of the network has improved significantly. According to data analysts, reduced costing and the network’s efficiency might help the coin to surge even further. Not to mention, ethereum based decentralised apps are becoming increasingly prevalent worldwide. As an average estimate, the network’s most common type of applications Defi stores more than 16 Billion worth of crypto assets in their protocols as of 2021.
Other reasons to stake your interest in Ethereum are listed below.
- Ethereum network has competitive team members, including the founder – Vitalik Buterin. He holds a reputable image in the crypto space.
- Being the world’s second-largest cryptocurrency, Ethereum has been around for years. Potential investors believe it to be more reliable than many other bubble cryptocurrencies.
- You can use Ethereum based decentralised apps to buy or sell Non-Fungible Tokens (NFTs) as collectables.
If you believe that you should also buy some stake in Ethereum, please continue reading below as we discuss where and how you can buy it.
Where can you buy Ethereum (ETH)?
Since Ethereum is one of the most popular cryptocurrencies, it is available worldwide on almost all major crypto exchanges. You can also buy them through brokerage firms. However, most brokers do not sell real cryptocurrencies. Instead, you could only buy a CFD contract that enables you to speculate over the prices of digital assets to profit. However, a few hybrid brokerage setups like eToro allow you to buy real crypto coins or enter a CFD contract.
Whether you wish to sign up with a crypto exchange or prefer opening a live trading account with a broker of your choice depends upon your trading preferences. However, account verification is mandatory in each case. You can use a national Identity card, driving license or passport for the same. Your selected platform also needs you to submit a copy of your utility bill or bank statement to verify your address. Once your account is verified, you can add some funds to your account and start buying Ethereum right away.
Where to hold your Ethereum (ETH) tokens after buying them?
Besides significant growth in the popularity of cryptocurrencies, the number of hacking attempts have also increased exponentially. Therefore it is crucial to understand how you can keep your digital asset secure. Commonly cryptocurrencies are stored in crypto wallets. However, some crypto wallets are known to be safer than others. For instance, an exchange provided online wallet is more prone to hack attempts than an encrypted hardware wallet with no internet access. It would be best to have an offline crypto wallet to store your ERC20 tokens.
What to do after having Ethereum added to your investment portfolio?
There are multiple ways you can use Ethereum tokens. Let’s discuss a few of them.
1) Trade ETH against other digital currencies using an exchange or broker
Cryptocurrencies are known to have increased volatility. Prices of digital assets can fluctuate wildly, becoming ideal tradeable assets for speculators. You can also trade Ethereum against different cryptocurrencies and make reasonable returns. Depending upon your choice, you can either sign up with an exchange, or a broker to get started.
2) Use ETH to participate in ICOs
Initial Coin Offerings (ICOs) is a process of fundraising for new blockchain-based projects. Most projects offer special discounts to people using Bitcoin and Ethreum to participate in the ICOs. Hence you can make hefty profits if a project turns successful.
3) Use ETH to Settle Your Bills
Being cheap and fast, Ethereum can be a solid choice for the facilitation of peer-to-peer transactions. Like Bitcoin and other liquid digital currencies, you can use ETH to pay for different products and services. Etherum holders can also benefit from smart contracts. Smart contracts incorporate different pre-programmed parameters into a transaction. These parameters need to be satisfied before funds transfers can take place. That’s how smart contracts eliminates the need for a third party like a lawyer or a bank.
4) HODL your Ethereum
Last but not least, you can also choose to hold your Ethereum in a wallet for extended periods. Undoubtedly, HODLing your assets anticipating price appreciation is a common practice amongst traders. Remember, cryptocurrencies are highly unpredictable and can also lose their value in a blink of an eye. Therefore, do not invest the money that you can’t afford to lose.
Conclusion
Following the bullish momentum, Ethereum’s price may continue to rise for weeks, or it may fall. Timing the cryptocurrency market is almost impossible. Therefore, think well before you stake your interest in it. Not to mention, looking to buy Ether for short-term profits can be riskier activity. However, if you plan to invest in Ethereum on a long-term basis, It can be a worthwhile option to consider.
