By financen | October 24, 2017 - 5:45 pm - Posted in Trading

Ethereum was first publicly introduced in 2015, at that time its worth was just about 8$ per unit. However, that changed unexpectedly fast and since this year’s January Ethereum value has risen by 3 500% to the value of over 290$. Whether Ethereum becomes the second Bitcoin is still a question of speculators and traders. But one thing is sure now, Ethereum is the second most popular cryptocurrency of the world – its market cap is over 27 billion. To properly understand Ethereum’s potential, you should be aware of the fact that even the director of the Polychain Capital Fund, who focuses on cryptocurrencies, predicts that Ethereum will overcome the price of Bitcoin by the end of 2018. And the current price of BTC now? Around 4700 dollars! Whether that might actually happen so soon is hidden from us for now, but one thing is certain, Ethereum does have a promising future in the light of the current cryptocurrency up trend.

How Ethereum trading works

Cryptocurrency trading, including the Ethereum is possible with financial instrument CFD. That is based on a pretty simple principle and it is possible to earn money on the growth of the Ethereum price as well as on the decline of the Ethereum price. CFD trading is a type of leverage investing, so it is possible to generate a modest income even with a small start up capital. If you, for example, select a trading leverage 1:30 and you invest 20 dollars in this position, you do not trade only with the capital of 20 dollars but with the funds thirty times larger, so with 600 dollars. This leverage will provide you company where you decide to trade, so it would be possible for you to make money from the market even the price changes just a bit. However, keep in mind that cryptocurrencies can be very volatile as they can very quickly change their prices, so you need to use appropriate leverage according to your knowledge with crypto trading. Despite the high volatility of the market that cryptocurrencies and even Ethereum face, we can say that we haven’t seen a cryptocurrency that its price would change just in a 2 year time so swiftly.

Who is backing up Ethereum?

In addition to the vast number of options for which Ethereum have got usage, there might be an another fact behind such a rapid price development. We think it may have something to do with the list of companies that stay behind this currency. Do you know ING, J.P. Morgan or UBS? If you do not, you will most certainly know Microsoft or Intel, which support Ethereum along with dozens of other giant corporations. How experts see the rise of Ethereum can be found in the article „Why investors should be stocking up on Ethereum“.

How Ethereum differs from Bitcoin

Bitcoin‘s only purpose is to be used as a digital currency. Just to pay for goods or services, there are no other usages for BTC. But the problem with BTC is that the transactions take about 10 minutes to be proceeded. And therefore it is possible to use it only for deals where this time delay is acceptable and doesn’t cause any problem. On the other hand, Ethereum is not just a currency as BTC is. Ethereum also serves to the app developers to create blockchain applications plus the transactions are extremely fast and they take only about 15 seconds. The potential of this currency is therefore obvious.

30% price change in one day? No problem for Ethereum

In case you want to speculate on price development of this cryptocurrency, you should closely monitor its current Exchange rate. The price of Ethereum moves quite unpredictably and so is not unusual that it can change in a single day even by a few dozen percent. That proves even the Ethereum history, the biggest price shift was 30%, in one day.

You can trade Etheruem against majors such as American dollar, euro, Japanese yen, or even against Bitcoin. If you notice that there is a repeating formula on the Ethereum chart, try to take your theory on your CFD demo account. Here, you do not have to worry about losing your money and you will still be able to verify your theory.

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