Ethereum, which is second only to Bitcoin in terms of global market capitalization, has seen its share of surges and crashes since its launch in 2015. But the cryptocurrency has been turning heads recently amid a rush of interest in the crypto space in general, hitting new highs in April 2021.
So what is Ethereum and why is everyone talking about it? Is it the same as “ether”? What gives it value, and what is its long-term investment potential? And how do you actually buy it?
Here are a few things to consider regarding Ethereum, and — if you decide it’s something you’re interested in — some common ways to buy, hold or trade the cryptocurrency.
Investing in Ethereum through centralized exchanges.
Before you take out your wallet, you better be sure that you actually know how to invest in Ethereum. First, you’ll first have to open a crypto wallet to store it and look for a cryptocurrency exchange that allows buying and investing in Ethereum in your region. Most major centralized exchanges offer a custodial wallet service, which allows you to send and receive cryptocurrencies.
These include exchanges like:
things you should know before investing in Ethereum
The first thing to know is that the Ethereum market is still volatile, just like it is the case with any cryptocurrency. This makes them slightly riskier compared to traditional investment enterprises. Still, your investment can pay off handsomely, too, since Ethereum is among the three most popular cryptocurrencies used for all types of transactions today.
Also, the most popular approach to investing in Ethereum is buying it when its price is low and selling it later when it goes up. Once the prices go down, you can re-buy it and re-sell in yet another investment cycle. Yet, you have to be aware that waiting too long for either buying or selling can make you lose on your investment. You can try to mitigate this by hiring a consultant or doing research on price trends, but this can cost additional time and money. If you’re a beginner in the crypto or investment world, such day trading is likely to result in a loss of money.
If you made a decision to invest in cryptocurrency despite the volatility and risks, know that the best approach remains to invest for the long-term.
Since no one knows what the future may hold, the golden rule is to invest in Ethereum only as much as you are willing to lose.