Simply put, Ethereum is not any crypto coin or cryptocurrency. Instead, it gets defined as the global computer for operating decentralized apps. ETH (Ether) is the cryptocurrency that empowers the Ethereum network. It’s also the most required payment form for operating the app or processing the transaction on the most-desired Ethereum blockchain.
Ethereum investing – A comparison with Bitcoin
Even though Bitcoin is excellent for its value store, it doesn’t support the smart contracts which Ethereum does. Hence, Ethereum arguably is capable for the storing of value. Today, several people still prefer bitcoin for storing the value because of the hard-capped supply. And while the supply for both Ether and Bitcoin are growing, the number of bitcoin circulation won’t be more than 21 million ever. And with Ethereum 2.0 as well as EIP-1559, there is a chance of Ether becoming deflationary, which means, that the token supply will gradually come down with time. It something you need to know when you are reading about Ethereum investing trends.
Ether has been in competition with Bitcoin for the highest spot at the biggest cryptocurrency because of the market capitalization since 2015 when it got released. It also came very close to surpassing Bitcoin in 2018. However, both these coins witnessed all-time highs, and it has a promise to increase growth in the years to come. Experts anticipated that Ethereum might flip Bitcoin and emerge as the popular cryptocurrency.
The benefits of Ethereum
The great performance of Ethereum has drawn both institutional and conventional investors alike. Furthermore, Ethereum offers you a few benefits like:
1. Volatility
There was a time when it got looked upon as something negative. However, the intelligent investors have understood the market cycle patterns and can capitalize on parabolic gains which the market bubbles generate.
2. Liquidity
Arguably, Ethereum proves to be a liquid investment asset because of the global establishment of exchanges, online brokerages and trading platforms. It is possible to trade Ethereum for the assets and cash such as gold with very low fees. Additionally, the high liquidity gets linked with Bitcoin, which makes it a smart investment vessel if you are searching for a short-run profit. The online currencies can be a long-run investment because of the increased market demand.
3. Reduced inflation risk
Unlike the global currencies that the governments monitor, Ethereum comes with a clear inflation plan that gets subjected to reduced meddling. Also, the blockchain system is unlimited, and there is nothing to fret about the crypto getting deflated.
4. Decentralized funding
Ethereum is very young! Hence, the NFTs and a few other applications gradually becoming mainstream daily. And this newness brings a few unpredictable price swings and volatility that can come with scopes of huge gains.
Therefore, is Ethereum investing a good decision? It certainly can be, when you have done your research well. You also need to manage the coins better and observe the market. Investing in crypto is not the same as buying, selling or calling a broker. It’s essential for you to get involved actively in the process. Hence, you require a wallet. And this wallet is the basic part of this ecosystem, which provides you with the capacity to receive and send money.