Ethereum (ETH for short) is one of the top three cryptocurrencies that currently exist. Recently, its market value beat its immediate competition, and ETH now has the second-highest market value. With a worth of 246 billion dollars, it falls a few dollars behind Bitcoin’s $571 billion.
Unanticipated, out-of-control volatility is associated with the crypto market. Crypto reserves plummeted in 2018 and 2019 after having peaked for only a year in 2017. However, things are looking up since the crypto market has recovered from its discouraging decline. The sun shone on crypto in 2021, but many investors pulled out in 2022 as markets crashed. However, a boom is still expected to hit the crypto market in early 2023.
But more on Ethereum. It is seen as more promising than Bitcoin’s 2009-2011 breakout. Ethereum has strong financial backing and popular corporate support. If you are considering investing in cryptocurrency, we recommend starting with Ethereum.
This blog addresses five tips on investing in Ethereum that will help kickstart trading.
Create a digital wallet for safe withdrawals
The first thing you need to do is prepare to create a digital wallet. Leaving money in the crypto trading account of your choice is not safe. Upon withdrawing whatever amount of ETH tokens, always transfer them to a digital wallet or convert your Ethereum to USD for safe keeping and ease of access for later use. Since you cannot “hold” your coins, the tokens representing your coins can be stored in a digital wallet. Your coins become accessible through this wallet, making it easy to use for transactions or more crypto-trading. Most platforms (which we will get into soon) have the option of sending ETH to a digital wallet.
Picking a platform for trading
The kind of exchange is one of the most important factors when selecting a bitcoin trading platform. Trading platforms for cryptocurrencies may either be coin-to-cryptocurrency exchanges (C2C) or fiat exchanges. Investors may trade Ethereum, one of the two biggest cryptocurrencies in the world, with ease on exchanges that deal in fiat currency.
Some of the best platforms are Kraken, Bitstamp, Binance, and Bitfinex. These exchanges allow users to exchange Ethereum.
Keep your emotions in check while trading
Cryptocurrency, as we have already mentioned, is too volatile. Sometimes, values rise by up to 50%, acting as the proverbial dangling carrot in front of the eyes of investors. It is wise to act on such hikes, but it is also advised to be careful. Because of high volatility, your eagerness could prove to be harmful.
When dealing in crypto, do not let emotions, greed, or enthusiasm take the best of you. Think of crypto trading like walking through a minefield; one wrong, misplaced step could be the end. You cannot afford any room for letting your emotions guide you through, unlike traditional investing. There are no whims, and there are no guesses. Keeping your emotions tight-lipped applies to Ethereum more than other cryptocurrencies as most people deal in ETH, with Bitcoin now out of the reach of most.
Your goal while trading ETH should be to generate small gains on multiple transactions. Do not go heavy-handed on a single Ethereum transaction. This playing-it-small helps with mitigating losses. Going big or going home is not the way for Ethereum.
Do your research – do not go in blind
Ethereum is backed by smart, cutting-edge tech that offers the currency in many nooks and crevices. It has a multitude of domains that create formidable results paired with public opinion and political situations. The growth of this currency can be credited to software applications, the public’s take on nascent cryptocurrency, overall market volatility, and popular corporate support and usage. Anything can happen at any given time.
This is why homework is essential. Never go into an ETH transaction without researching any new developments or trends that directly or inadvertently impact ETH’s monetary value. Ethereum’s official social media handles and blogs are always up-to-date with the latest information about buying and selling crypto. You can keep yourself abreast of everything they offer to gain a competitive edge. Practice is not the only thing that makes you perfect – at least not in the world of crypto. Research can get you to mastering ETH trading just as fast.
Risk management is essential
Ethereum is as bright as the sun in the crypto domain. However, all cryptocurrencies are volatile, and Ethereum is no stranger to volatility. It is essential to reign in all your impediments and minimize your risk to the best of your capability. If you are not adept at risk management in general, then trading with Ethereum, in particular, will become a hassle.
Start with baby steps. Always begin with smaller amounts of money – remember the goal of Ethereum trading from above? We are to monetize on smaller amounts of money, increasing the number of our investments instead of going all guns blazing with larger amounts. Keep it slow and steady, but most importantly, keep it small. Besides, small-sized investments are perfect for beginners.
Once you have gained more experience, you can start with larger amounts. The higher your confidence, the better your next approach toward Ethereum trading can be.
Ethereum retains its second spot on the list of the most commonly traded cryptocurrencies. Before diving in, you need to be aware of the high volatility associated with not just Ethereum but all cryptocurrencies. There are many uncertainties and risks with ETH trading. However, doing your homework can ensure you succeed in making profits. Try coming up with a trading schedule and strategies that suit you best. You will be far more likely to succeed at ETH trading with research and homework than blindly jumping in.