Trader on Ethereum using CFDs
Have you ever traded bitcoin or heard about this accessible cryptocurrency at BearsMarkets? But do you know the Ethereum? Also known as “Ether”, this new cryptocurrency is likely to compete with bitcoin in the face of the success it has had since its first listing and the significant rise in its price. While only a few online brokers currently offer CFDs (including BearsMarkets) on the Ethereum price, it is particularly interesting to start investing on its course today. We will explain through this complete article what this virtual currency consists of and what are its advantages as a stock market asset.
Ethereum or Ether: What is it?
Originally, Ethereum is the name given to a platform that uses blockchain technology and allows its users around the world to develop online applications through it. Of course, if it is possible to create free applications through this platform, other applications are intended to be paid. It was therefore necessary to create a usable currency on this platform.
Thus was created Ether, the official currency of Ethereum. Since its creation in 2015, Ether has benefited from the recent enthusiasm of investors for crypto-currencies such as Bitcoin, which has also quickly made it popular. This is the reason why it is now possible to speculate on the price of this virtual currency in the same way as on other assets and thanks to CFD trading platforms.
Also remember that several crypto-currencies have been launched since the creation of Bitcoin. However, the Aether has become in just a few months the second most used cryptocurrency in the world, the first remaining for the moment Bitcoin.
How does Ethereum work as cryptocurrency?
Ether or Ethereum is a cryptocurrency or dematerialized currency whose functioning is very similar to that of its counterpart Bitcoin. The technology that Ether works with is called Ethereum. It is actually a computer system based on chains of blocks.
But unlike Bitcoin whose main utility is to be a dematerialized currency, the Ethereum has other functions. Indeed, this platform allows among others to create varied and decentralized applications.
As for the assets that you can trade online thanks to CFD Ether, it only concerns the cryptocurrency function. It is therefore a computerized alternative to traditional currencies whose price evolves live and in real time and can therefore be traded by traders with an account at BearsMarkets.
As we will see below, since its first listing, Ether has indeed followed a particularly volatile upward trend and is therefore one of the most profitable assets of this year. That’s why she keeps attracting new investors every day.
What are the differences between Ether and Bitcoin?
You probably wonder what makes the difference between the oldest cryptocurrency, Bitcoin and this new cryptocurrency Aether. However, as we will explain it here, Ether seems to have some non-negligible advantages compared to its competitor. Although Bitcoin is still today the most widely used alternative currency in the world, Ether is fast approaching its performance and therefore represents a serious competition.
Indeed, as we mentioned above, the Ether was not originally conceived as a virtual currency but rather as a service allowing users of the Ethereum platform to monetize the applications they created there.
While Bitcoin has a time and offer limit, Ether is not. In addition, the duration of transactions with one or another of these technologies also differs. Indeed, while a transaction with the Bitcoin requires a delay of about 10 minutes, the same transaction with the Ether takes only a few seconds. It is this difference that explains the higher volatility and greater liquidity of Ether against Bitcoin.
Finally, another major difference between Bitcoin and Ether concerns the holders of these virtual currencies. Indeed, when it was created, Bitcoin was exploited by early adopters who therefore hold all the units of this currency. Ether, meanwhile, was created through a crowdfunding operation. In this way, it is owned by the investors who placed their money in this cryptocurrency and therefore who bought it.
How does the course of Ether or Ethereum evolve?
In order to speculate at best on the price of Ether or Ethereum, it is of course necessary to know how to anticipate future variations in its price. In this sense, you must know the factors that influence its listing in the market.
The factor that seems to be the most influential at the moment in the evolution of the Ether price is in fact linked to the Ethereum platform and its evolution. This one regularly crosses stages called “hard forks” which make the platform more powerful and more stable. Thus, the crossing of new stages generally allows the price of the Ether to be appreciated on the stock market. However, an incident during this stage crossing may also affect the course of the Ether. Thus, the Ethereum has been hacked at one of these hard forks recently, which has had the effect of dropping the price of Ether by nearly 30%. Of course, since this incident, the security of the platform has been revised and strengthened to no longer suffer such drawbacks.
Another factor that greatly influences the evolution of Ether prices is an external factor. This is indeed the value of its direct competitor, Bitcoin. Indeed, given that Bitcoin remains the original cryptocurrency and the most used alternative currency in the world, its price is directly correlated with that of other crypto-currencies such as Ether. Thus, when the price of Bitcoin rises, this is interpreted as a sign of renewed investor interest in alternative currencies and pushing Ether purchases as well, causing an uptrend on that value.
It has also been noted recently that investors who take a bid on Ether are generally investors with positions in Bitcoin that are looking to diversify their positions. The Ethereum shows more growth potential than Bitcoin and is also a more flexible asset, which makes it more attractive to traders.
To finish this part about the factors that influence the course of Ether, we must also talk about the very speculative aspect of this asset. Indeed, you can also base your investment strategies on this value on a technical analysis of its course. The stock charts available on the BearsMarkets platform will give you generally reliable trend indicators. Do not hesitate to use them.
What are the advantages of Ether and why invest in Ethereum?
Choosing to invest your capital on the price of Ether is particularly interesting in view of the many benefits that this asset presents and that we propose to discover here in more detail through some explanations.
The first advantage of Ether as an investment asset lies in the very strong interest it arouses in cryptocurrency users. Since its launch, the number of transactions made from this electronic currency continues to increase as new users, each month more and more numerous.
Another sign that you need to invest in Ether is the increasing market capitalization of Ethereum, which is fast approaching that of its competitor Bitcoin. It is also for this reason that many investors who put their money on Bitcoin are now interested in Ether and open positions on this value.
Finally, the last advantage of the Ethereum against Bitcoin concerns risks that are less important here. This difference in the level of risk is primarily due to the speed of transaction offered by the Ether, which is only a few seconds, which further protects long-term positions.