Ethereum trading, main features of ETH, how to become professional trader and investor
Ethereum is a platform for decentralized applications. The concept of this system was offered by Vitalik Buterin in 2014. Canadian developer positioned his project as an alternative Blockchain system with brand new tools for developers around the World. This is a complete Ethereum trading guide for beginners, which will help you to understand how to buy this crypto and what are the main aspects that influence Ethereum’s price.
Why Ethereum looks attractive for traders and investors
This system has wider tools as compared to Bitcoin. Main Ethereum’s idea is to provide businesses as well as individuals with reliable tools for transactions and their activities.
”One of the most interesting feature of this network is smart contract. It helps parties to cooperate without mediators. Those smart contracts are autonomous and are executed automatically once parties meet all conditions, written in this digital “agreement”.
Ethereum has better scalability than Bitcoin meaning the higher speed of transactions and their lower fees. The project has an open source nature allowing businesses to create their own Blockchains.
The key factors to influence Ethereum’s price
Ethereum is a decentralized network with no governmental body to supervise it or to affect coins’ price. There is no regulatory authority as compared to traditional markets where central banks have the right to issue currencies and to affect them by their decisions.
”The only thing that matter here is the supply and demand. The higher the last is, the more expensive coins will be. Ethereum’s price has grown significantly since the first day but because of lack of liquidity, Ethereum remains volatile.”
Cryptocurrencies’ trading is not an easy trip to do. You need to monitor several aspects in order to take a decision as they influence demand, which is crucial for Ethereum’s price. Here they are:
Experts’ opinion
This is one of the main factors that affect ETH’s cost. Those experts may be famous investors or developers from cryptocurrency community. Their comments are very important for traders and may result in huge price changes. It is to mention that Vitalik Buterin’s view is also a key factor that may influence Ether price.
”In addition, Ethereum’s cost is vulnerable to opinion towards the crypto industry in general. When some famous investors such Warren Buffet make statements related to coins, their price may rise or fall depending on the nature of comments. Please, notice that Buffet is strongly negative towards this industry in general in the moment of writing.”
Deployment of technology
Ethereum is more than just a cryptocurrency as this platform allows users to make contract and create dApps (decentralized applications). This is one of the key factors of Ethereum’s success. The wider this technology will be spread, the more users it will attract and the more investments Ethereum will get in future. This may positively affect ETH’s price.
Ethereum’s popularity grows as this technology attracts attention of both businesses and consumers. Smart contracts, for example, offer the opportunity to conduct transactions without mediators. How do they work?
”Let’s see a simple example. A person wants to purchase some goods in an online shop. Before the appearance of smart contracts, buyers had to pay in advance and depended on banks. Smart contracts offer the opportunity to exclude all mediators between the business and its clients as they include all conditions of a transaction.”
Let’s say a buyer purchase a keyboard online. He does all the necessary steps on the website. The funds, necessary to complete the transaction are frozen within the Smart contract, which includes the price of this keyboard, and the delivery conditions. Once the buyer receives the keyboard, he confirms the transaction and his funds are transferred to online shop.
Events and investors’ moods
Every professional trader and investor has seen at least one huge price drop irrespective of the market they trade. There was significant price falls on stock markets during 2008-2009 crisis period, provoked by investors’ panic and rumors.
”In order to make Ethereum’s trading successful, you need to monitor all important events and predict investors’ reaction to them. Let’s say there are rumors that US government is going to strengthen measures towards exchanges. What will happen in this case with cryptocurrencies? They will likely to drop as such rumors lead to panic.”
All bans and restrictions lead to fears and result in downtrends. However, when there are positive events, Ethereum’s price goes upwards.
Technology uniqueness
One of the main factors of Ethereum’s success is uniqueness of the technology. As we had mentioned it before, this system was created not only to support the inner cryptocurrency or to allow user to conduct faster and cheaper transactions as compared to Bitcoin, but also to provide businesses with wide range of tools to create different applications and to use smart contracts.
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