The idea here is to actively trade Ethereum currency to secure your profits. This is because the cryptocurrency market is so volatile that the price of Ethereum goes up and down all the time. Therefore, there are plenty of opportunities for quick profits.
If you decide to buy Ether when the price is low, you can sell it when it goes up and lock in your profits before the price of the coin goes down again. Once more, then, when the cost drops, you can purchase Ethereum and rehash the cycle, hence creating more gain.
For instance, assuming that you purchased $1,000 worth of ETH in March 2017 and held it long haul until March 2018, you would now have $25,000 worth of Ethereum. However, if you had sold your Ethereum in December 2017, you would have secured about $45,000. You could then use some of that money to invest back into Ethereum and keep it for another set of earnings. By doing this, you will have already recouped the money on your investment while also setting yourself up to earn even more money.
The future of Ethereum
Due to the fact that many ICOs intend to publish their own coins on the Ethereum network in the coming months, many expect to see Ethereum reach its highest value again and even surpass it. For this reason, buying Ether while its value is still considered low could be a good investment opportunity. If the price of Ethereum goes up in the near future, I would recommend locking in your profits, because nothing in the future is guaranteed. Even if the price goes up, it is very easy for it to start going down.
Remember, there are many factors that contribute to currency price volatility, such as regulations, competition, and market manipulation. To make money investing in cryptocurrencies, you need to have an idea of when it is time to take your profits. Sometimes waiting too long can make you lose money.
The disadvantages of investing in Ethereum in the short term:
- When it comes to the benefits that can be obtained with short-term investments, there are other currencies on the market that you can invest in and that will do better compared to Ethereum.
- With governments around the world creating new regulations for the cryptocurrency market, some of these regulations could affect the value and viability of Ethereum. For example, a regulation that taxes the profits of each operation could affect your income when investing in the short term or when actively operating.
- With banks and credit card companies stopping people from using their credit and debit cards to buy cryptocurrencies, the flow of new money entering the market has slowed down. This causes the growth of currencies to slow down, making it difficult to invest in the short term.
- Actively operating in the cryptocurrency market is risky for those who do not have experience or have a good understanding of how the market works.
How to invest in Ethereum: Before investing in Ethereum
Before I explain how to invest in Ethereum cryptocurrencies, you should make sure that you have a secure wallet to store your Ethereum in. Keeping your coins on an online exchange could be risky. Exchanges can be hacked and your coins can be stolen. The best way to protect your cryptocurrencies is by having a wallet. Where you have full control of your private key.
Note: Your private key is the way to access your wallet (like a password). If someone has access to your wallet, they could steal your funds.
How to invest in Ethereum with fiat currency
A broker exchange allows you to exchange your fiat currency for cryptocurrency. While there are quite a few broker exchanges, only a small number of them are considered reputable. The three main exchanges are Coinbase, CoinMama and Cex.io.
All you have to do is sign up, confirm your identity. Deposit your funds into the account, and then buy ETH. You will then be able to send your ETH from your broker exchange wallet to your Ether wallet using the designated wallet public key (wallet address).
Advantages of using a broker exchange:
- Highly professional and well-funded.
- Good customer service.
- Easy to navigate and learn to use.
- Ideal for novice investors.
- You can use bank or credit cards to deposit cash in exchange for cryptocurrencies.
- Safer than most other exchange houses.
Disadvantages of using a broker exchange:
- High transaction fees.
- Subject to KYC rules and therefore requires identity verification.
- It may be inspect and your transaction information turn over to tax authorities.
- You do not own the private keys of your wallet.