Ethereum Investment - Explanation and How to Invest

Ethereum Investment - Explanation and How to Invest

Ethereum Investment

Ethereum Investment


Netgenz - Stock | Investment in the form of digital currency or Cryptocurrency is becoming a trend in society. Currently, many millennials are also looking at this investment because it looks like it's easier to trade and has great opportunities. One of the most attractive crypto assets is Ethereum. Did you know that Ethereum is the second-largest cryptocurrency in the world after Bitcoin? If you have questions and want to know the understanding and how to invest in Ethereum, read the narrative below.

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What is Ethereum and how it works

Ethereum was issued in 2015 by Vitalik Buterin. This mechanism is made for a democratic environment that is used for business, an organization to currency. Buterin was assisted in the development process by other developers, namely Gavin Wood and Joseph Lubin. They helped Buterin in the crowdfunding process. Funds from the contribution were successfully raised in the amount of 18 million US dollars. That's not all, Buterin threw the idea into a Thiel Fellowship until he raised $100,000 in funding to create and upgrade Ethereum. The network was successfully created and officially launched in 2015 until now Ethereum continues to develop the network.

By using Ether, the Ethereum Blockchain platform can run. When a developer wants to create a decentralized program (dApp) and host the program on Ethereum, they have to spend production funds. Here the developer will use the Ether currency to pay for production. The more difficult and large the creation of the application, the greater the Ether that needs to be issued, and vice versa. The role of Ethereum is to help developers who want to run their projects without risking individual information.

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Reasons Why You Should Invest In Ethereum

Many Cryptocurrency experts have a positive opinion about the future of Ethereum. Blockchain 2.0 technology owned by Ethereum is considered to be able to improve and rotate various industrial sectors.

In today's era, more and more technologies are developing in the industry, such as insurance, broadcasting, finance, property, and others that are connected to the internet. With smart contract technology and Ethereum's decentralized program, it can be thought that it is easier to help with business transactions.

In addition, since its launch, the price of Ethereum has increased to reach USD 21 billion on November 12, 2018. The price of Ethereum has also recorded its highest record so far, which is USD 2,047 per chip. Wow, isn't that a pretty phenomenal number? In early 2021, Ethereum was only marketed for 10 million. Even though Ethereum is the 2nd largest Cryptocurrency and already has the highest price, the price increase will occur in the next few months.

The price increase was controlled by the decision of the largest bank in the world, namely Visa which provides Blockchain and crypto-based feature facilities in the Ethereum network. In addition, the Non-Fungible Token (NFT) based auction affected the increase in the price of Ethereum.

Ethereum is making improvements to the Blockchain 2.0 network. In addition, the Chicago Mercantile Exchange derivatives exchange has launched ether futures. That way, it is hoped that this launch will have a greater impact on the ether coin and more opportunities are open for investors.

The advantages of Ethereum compared to Bitcoin are, firstly, there is no limit to the amount of Ether that is created (in the mining process) and there are only 21 million Bitcoin units. Second, the time it takes is really short, that is, it only takes a few minutes and the time it takes for Bitcoin business transactions is around 10 minutes or more.

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Ethereum Investment Steps in 2021

This Ethereum investment step is really easy to implement either in a local or international environment. To participate in Ethereum investment, we can take various steps, one of which is as follows.

ETH Token

A token is a digital asset that is issued by a particular project, which can be used to pay to enjoy the services provided by that project. Generally, tokens are hosted on Blockchain like Ethereum. In general, tokens have a direction instead of running a service from the project that provided the token. Tokens can also act as digital assets to represent one ownership.

Tokens are created in decentralized programs (dApps) hosted by Blockchain that acts on smart contracts, such as Ethereum. Smart contracts are paid out with Blockchain native coins, then the user will receive some tokens which are distributed, in turn. This allows the user to connect with the dApp.

DApps that receive coins in exchange for tokens will then improve their services by using the tokens as part of the project they want to build. Tokens are often representative of some form of value to be used in a project. Meanwhile, the Ethereum token that is often found in several platforms is ERC 20. To store ERC-20 tokens, an Ethereum wallet such as Metamask, MyEtherWallet, Trust Wallet, or another Ethereum wallet is needed. The steps for making this token have also been on several websites. Examples of ERC-20 tokens include Tether USD (USDT), Binance Coin (BNB), Maker (MKR), Basic Attention Token (BAT), and many others.

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ETH CFD

CFD is a derivative product in which a broker agrees to pay the trader for the difference or difference in the value of an underlying security, stock, bond, and other asset starting with the initial and final determination of the asset. This CFD is one of the steps to invest in ETH.

Some of the reasons to choose Ethereum investment via CFD trading are:

  • Can benefit both consumers and sellers;
  • Protection of investment portfolios;
  • Gaining global market access on one basis.

When choosing to do CFDs, we must choose a CFD broker that has been regulated. Bases that are licensed by high-end agencies such as FCA, ASIC, or CySEC have a plus because of their security. In addition, regulated cryptocurrency CFD brokers should accept deposits and withdrawals with real-world payment systems such as debit/credit cards, bank accounts, or electronic wallets, such as Paypal.

When trading CFDs, Ethereum means that the investor does not have the instrument that triggered it. However, investors can trade Ethereum for other cryptocurrencies. Meanwhile, at the same time will gain access to crypto-to-fiat pairs such as ETH/USD.

In the CFD trading process, the broker is the main part when doing CFDs. A trader must be careful when choosing a broker. This is done to minimize fraud. Here's a guide to choosing a broker, namely;

  • Think about the spread that you want to apply, because this will affect the amount of profit you want to receive
  • Choose a broker that provides a demonstration account as a training facility
  • Check whether the broker's customer service is responsive, responsible, professional
  • See the discussion given by the client, towards positive or negative things
Illustration Ethereum


Trading through CFDs has several disadvantages, one of which is as follows:

  • Too high a spread. This means that a trader will be asked to pay the spread either when entering or exiting. With this determination, you can profit from the CFD market.
  • Lack of strong terms of CFD trading. This means that the terms of CFD trading are not strictly regulated. Therefore, it is necessary to be alert when choosing the right and most trusted broker.
  • High impact trading CFDs. Because it is applied on a margin basis, which causes a trader to use less capital. However, a trader can incur heavy losses due to high leverage and market conditions.

Grayscale ETH Trust Shares

The next step for investing in Ethereum is through Grayscale. Grayscale is one side of the traditional financial product that manages the Cryptocurrency prices offered by Grayscale Investments. Grayscale Investments is the world's largest digital asset management firm. Grayscale Investments as part of the Digital Currency Group (DGC) which is held by founder and CEO, Barry Silbert. DGC is Coindesk's parent company.

Grayscale ETH Trust is an investment management company engaged in managing Ethereum trust funds in the world. The company is counted as the first investment facility of this type of crypto asset to regularly submit its financial reports to the US Securities and Exchange Commission (SEC). Today, Grayscale has $27.7 billion in business assets.

Grayscale Ethereum Trust is a product in the form of an open private trust fund that provides access to auditable ETH through an investment facility. Grayscale Ethereum Trust traded on OTCQX and has the stock code ETHE. This asset is the second digital currency investment facility to receive SEC-accredited status after BIT.

ETHE provides a secure platform for the public to gain access to Ethereum. The funds they manage meet the requirements of OTCQX, the top market that OTC Markets operate, and are listed under Side 12(g) of the Securities Exchange Act of 1934.

In December 2020, the Grayscale Ethereum Trust was briefly closed because ETHE's share price fell 18% in one day, even though the price of Ethereum only fell 3%. The reduction is because the public perceives that ETHE is marketed at a price that is higher than the original price until its value plummets in the stock market.

But in February 2021, Grayscale Investments gave the good news that it had reopened the Ethereum Trust after 2 months of being closed. As for when it was opened again, the trust fund had an Ethereum account of USD 4 billion. Grayscale is a holding company that listed five new trusts for crypto assets. Some of them are related to Decentralized Finance (Defi).

As of February 24, 2021, the ETHE offering price was USD16.65 with an annual increase of 4.24%. The overall profit that investors can get in a 5-year run shows an ups and downs chart, but in the last few months, the gains have been significant.

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Ethereum Tracker Certificates

Tracker certificates are certificates issued by banks or financial institutions. The seeker's certificate describes the change in the value of the basic asset price movement 1: 1. The underlying asset can be in the form of, for example, stocks, bonds, commodities, currencies, or a combination of various underlying assets.

Seeker certificates generally have long-term falls and symmetrical returns that follow price movements that trigger 1:1. Seeker certificates give strength gains in up markets (called Bulls) and down markets (called Bears).

ETH Futures on CME

The Chicago Mercantile Exchange (CME) is the 2nd largest futures exchange in the United States. Initially, this company was created in 1874 called the Chicago Produce Exchange. Then in 1919, they changed it to the Chicago Mercantile Exchange as a starting point for innovators in the industry. CME trades financial futures contracts, options, and stock index futures contracts.

The Chicago Mercantile Exchange is the largest exchange for live commodity futures, foreign currency, and Eurodollar contracts. In 2007, CME merged with the Chicago Board of Trade to create the CME Group, one of the largest financial exchanges in the world. Subsequently, in 2008, the Chicago Mercantile Exchange (CME) acquired NYMEX Holdings, Inc. the so-called parent of the New York Mercantile Exchange (NYMEX) and Commodity Exchange, Inc. (COMEX).

In 2010, the Chicago Mercantile Exchange (CME) bought a 90% stake in the Dow Jones stock and financial index. The Chicago Mercantile Exchange (CME) grew back in 2012 with the purchase of the Kansas City Board of Trade, a player controlling hard red winter wheat. And in late 2017, the Chicago Mercantile Exchange started trading in Bitcoin futures.

In February 2021, Etherum started marketing on CME after experiencing a downturn. New CME Ether Futures developed by the most important, most diverse, and regulated derivatives market, home to Bitcoin futures and options used to manage Cryptocurrency risk.

Finally, a collaborative program in the form of launching ETH futures moved ETH to the highest level. On the Binance-only exchange, ETH was strong all the way to the 1,830 price level just moments after they started trading on the CME.

Illustration Etherium


Some advantages that can be obtained through ETH Future CME, namely:

  • ETH price change problem info speed
  • Transparent price
  • Strong index
  • Capital effectiveness

Alternative Investment in Other Cryptocurrencies

Investments in the form of digital currency are being favored and have great profit opportunities. However, at fluctuating prices, these digital currencies can cause losses.] The popular digital currencies in crypto are Bitcoin and ether. Actually, it's not just the two currencies because crypto still has various other types of currencies. Well, for now, other cryptocurrencies are scattered including:

EOS

EOS is a Blockchain base that is useful for providing facilities for commercial program needs, whether web-based or mobile-based. In this currency, membership mechanisms have authentication, database, asynchronous communication, and schedule set up via core and cluster. The arrangement of mechanisms is made to enable scalability, ensuring that millions of business transactions can be executed every second.

Ripple (XRP)

XRP started going public in 2013 after previously being used privately for internal business transactions on the Ripple Network. In 2013, Ripple was legal to be used as a medium of exchange and payment widely. In 2021, RXP's market capitalization will reach USD 59 billion, or around IDR 823.8 trillion. Buying Ripple cryptocurrency is not easy, because Ripple is not on the Coinbase trading exchange. The price of Ripple is currently at USD 0.5. This price is considered a low price.

Litecoin

Litecoin was developed by Charles Leedi on Cryptocurrency exchanges in 2011. Litecoin has faster transfer times and is the first digital currency to use the script security mechanism. Initially, in 2018, Litecoin's market capitalization successfully touched USD 14 billion (Rp 182 trillion), and in May it was at USD 6 billion. Meanwhile, 1 LTC currently costs around USD 107.

Stellar

Stellar has a similar role to Ethereum, with the advantage of a small business transaction fee of 0.00001. Stellar Lumens (XLM) has become one of the most popular digital assets. XLM is a native cryptocurrency that works on the Stellar software technology which was released in 2014.

The special mission of the Stellar base is to be a cross-border or inter-state payment solution that eliminates the middleman. This platform promises the ability to complete business transactions in the shortest possible time, which is only 5 seconds. This can be faster than Etheruem which takes 3.5 minutes.

NEO

NEO became popular because of the improvement of smart contract technology that can search and automate the transaction process on the Blockchain. Currently, the price of NEO is around US$ 42 per piece. The price is predicted to continue to rise by witnessing the record year to date which has reached 200%.

Cardano (ADA)

This Cardano crypto asset has a valuation that reaches 45.82 billion US dollars. That amount is equal to 2.96% of the total cryptocurrency market valuation. Cardano itself is a 3rd generation Blockchain base. This crypto asset was developed by one of the creators of Ethereum, Charles Hoskinson in 2015 and started to be issued in 2017.

The Cardano Blockchain Network was created as an alternative to Ethereum. Currently, the price of ADA is traded in the range of 1.43 US dollars. The crypto asset had reached its highest price in the range of 24.5 US dollars in the middle of last May.

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