Being in the crypto industry, it’s pretty convenient to have heard of Bitcoin. It’s easily the centre of mainstream media attention as it is quite rightly the front and centre of regular news reporting.
However, while Bitcoin (BTC) enjoys its position as the #1 token in the industry, tech-savvy investors can’t overlook the second largest token by market cap, Ethereum (ETH).
But, What Is Ethereum?
Ether (abbreviated as ETH) is utilized over an open-source Blockchain network called Ethereum. Apart from being the second largest token by market cap, Ethereum has earned a name for being the go-to option for developing decentralized applications (dApps).
Additionally, the network’s ability to execute smart contracts makes it unique. Transactions over the ETH network take 16 seconds to process, permitting an efficient and speedy ecosystem. Moreover, since the shift in its ecosystem to ETH 2.0, analysts expect even better, cost-effective operations from the token.
So if you’re looking for a way to invest in Ethereum as a beginner, this could be the blog you need. In the following sections, we’ve explored different platforms to invest in ETH, investment strategies, and the different brokers you could be using to get started.
How To Invest In Ethereum – A Quick Tutorial
Being a fresher, it’s evident that you’ll be confused with the different steps involved in purchasing Ether. So here’s a quick rundown of how to invest in the token in four easy short steps.
- Choose an Ethereum Broker: The first step of investing in Ethereum includes choosing a reliable broker that allows you to trade ETH tokens. Here, you’ll need to choose between regulated platforms, have fewer transaction fees, and offer stringent security measures.
- Sign Up for an Account: You’ll need to sign up for your broker account in the following step. This step would require general information, government-validated ID, and some personal details to allow you to continue your ETH purchase.
- Deposit Funds Into Your Account: Once you’ve signed up for an account and it’s verified, you’ll need to deposit trading. This could be made via credit/debit card, bank transfer, or e-wallet.
- Invest in Ethereum: For the final step, you need to invest in Ethereum. To proceed with the same, search for ETH on your dedicated brokerage platform and enter the amount you wish to invest in the token.
Once you’ve completed these four steps, you’ll have access to ETH in your wallet in no time.
Ways To Invest In Ethereum
Investing in ETH doesn’t have to be limited to tokens. There are numerous ways in which you could invest in Ethereum. But to sum it up, here are three extensive ways in which you could invest in the token:
Buy Ethereum ETFs
ETFs are kicking off our list of main ways to invest in ETH. Exchange-traded funds (ETFs) offer a more streamlined approach to investing in ETH without signing up for a crypto exchange. Once you purchase them, a dedicated asset manager manages these ETFs and guides you through their ups and down.
However, you must be aware of the different platforms offering ETH ETF. In addition, other funds vary in terms of their fees and composition, making every trade fund unique.
Invest in a Crypto Portfolio
The second step involves a passive method of investing in Ethereum. Here, you’re required to invest in a Crypto Portfolio. These portfolios generally include a combination of different altcoins and cryptos.
Once invested, your portfolio receives exposure from projects of different sizes in the industry. For instance, you could get ETH and XRP under your portfolio. Moreover, you could easily get them over dedicated crypto exchanges like eToro.
Ethereum Stocks
Last on our list is the Ethereum stocks (not actual ‘Ethereum stock’ per se). This step involves buying stocks of companies loosely correlated with future prices on the ETH token to break it down.
An example of such tokens could be the CME Group (an enterprise offering future prices on ETH, linking them to the token). Or you could also invest in an organization that is a significant holder of digital assets.
Is Ethereum A Good Investment?
As one of the industry’s early tokens, Ethereum has been a part of the market since 2015. But interestingly, the token has been leading its spot for over seven years now, making its way to the second-largest coin in terms of market capitalization. So it’s best to view ETH as a long-term investment.
Besides, the performance alone isn’t a factor in determining whether or not you should be investing in the token. So, instead of looking for its performance, look for the fundamentals backing the token, ETH to BTC ratio, and the latest developments concerning the token.
However, the information above isn’t enough to determine whether or not ETH is a good investment. So continue reading as we further explore the token’s performance in our case study in the following sections.
Performance Since Launch
Before its launch in 2015, Ethereum held an ICO (Initial Coin Offering) that allowed it to raise funds to run the project. Here’s an overview of the incidents between its ICO and listing:
- Ethereum’s ICO raised an overall sum of $17 million.
- At the time of its launch in 2015, the token was trading around $0.75.
- Fast forward to 2022, ETH was able to move to an all-time high rate of $5,000.
- In just seven years of its trading, ETH has generated over 650,000% in gains.
Overall, Ethereum has been a consistent performer giving scalable returns in seven years.
Smart Contract Leader
Ethereum is known as the smart contract leader since it mastered the concept in 2015. Since its inception, the token has been at the forefront of operations, introducing concepts associated with Web 3.0, dApps, and others.
Besides, even after the introduction of several other more strong players in the market, Ethereum continues to be one of the most consistent dominators of the smart contract Blockchain. One of the primary reasons behind it could be the project’s public management team led by Vitalik Buterin.
Ethereum 2.0
Another crucial factor determining the success of Ethereum’s project is its recent ‘Merge’ into ETH 2.0. In addition, ETH recently switched to a greener, cost-effective ‘Proof Of Stake’ (PoS) consensus mechanism to streamline its future operations.
This move could help ETH solidify its position as a smart contract leader, increasing the project’s scalability capacity. This way, ETH will soon outpace its competitors like MasterCard, Visa, or Paypal.
Staking Rewards and Interest Accounts
Investing in Ethereum also gives you access to staking and interest accounts. It can be achieved via two different platforms:
- First, you can stake your Ethereum tokens via a cryptocurrency staking platform, which locks the money away at a third-party platform for a set period. You will get paid at an interest rate throughout that time.
- Second, in exchange for weekly interest payments, you may deposit your Ethereum tokens into cryptocurrency savings account at various online exchanges, including Crypto.com and Binance. You may make up to 8.5% a year at the former.
This wraps up our section on the different factors that rule the concept of Ethereum. Therefore, if we look at it, the project isn’t just another pump-and-dump scheme but a long-term investment that plans to get bigger with time.
How To Sell Ethereum And Cash Out
Buying and selling ETH are like two sides of the same coin. Once you invest in the token, selling is just the opposite. All you need to do is place a ‘sell’ order on a crypto exchange.
Or you could also be swapping ETH for tokens like USDT, USDC, or BTC. Additionally, if you’ve stored your ETH on a cold storage wallet, you’ll have to transfer your funds back to an exchange to sell it.
Is It Too Late To Invest In Ethereum? – BG’s Case Study
As a project, ETH is still on the verge of development. However, the project has come a long way in terms of its development since 2015. Over the years, ETH has multiplied in value multiple times, occasionally trading above the $4,000 price range.
However, thanks to the harsh crypto winter and its onset, ETH is currently amid a cumulative drawdown. The token has decreased by 80% since its last all-time high of $4,891 in November 2021.
Moreover, ETH’s transition from a PoW to PoS consensus mechanism to make it one of the few tokens to take a greener approach to scale its future wasn’t taken positively. This further impacted the token’s position and resulted in ETH’s brutal dig, falling 47%.
But since then, ETH has shown some significant signs of correction during the last few weeks of last year. Nevertheless, ETH has a positive year ahead, operating around the $1,200 range.
Note: Predicting the long-term value of any crypto project is challenging. Therefore, beware of the token’s potential future and invest only once you’ve researched enough. All the best!
Transact Your ETH Safely!
The irreversible nature of transactions on the Ethereum network is among its most significant features. Because an address is a very long case-sensitive string of random characters and numbers, it is essential to never type an address by hand.
Remember, your money might vanish forever due to a single error. So, before confirming a transaction, double-check all the information carefully. All the best!
