The sudden surge in the interest in crypto space has led to a soaring demand for cryptocurrencies, especially ethereum. Launched in 2015, Ethereum has managed to grab the title of “second-largest cryptocurrency,” next only to bitcoin in a relatively less time. While both bitcoin and ethereum are dependent on blockchain technology, they are far from being similar in various aspects.
But is the rising popularity enough a reason to invest in ethereum? To help people make an informed investment decision, rather than a decision induced by FOMO, we’ve listed down some important points that people should know before buying ethereum in India or elsewhere.
1. Ethereum is Highly Volatile
The growing buzz around Ethereum is making many people want to include it in their portfolio. If you’re considering doing the same, remember that ethereum is highly volatile. Ethereum’s price has always been on a roller-coaster ride. For example, the price of ethereum was between $5-$15 in 2016, but the same soared to a whopping $1,500 in early 2018.
Unfortunately, the price of ethereum has again dropped by the end of 2018, leaving its value at less than $100. But if you check its price today, it is again touching the sky. So if you’re willing to purchase ethereum, make sure you’re comfortable with its volatile and risky nature. The best way to include it in your portfolio is by treating it as a highly volatile alternative asset.
2. Start Slow, Scale Big
You shouldn’t go all out while investing in the initial stages if you’re new to cryptocurrency. To be on the safe side, start investing on a small scale and increase the bid as you begin understanding the crypto space and its nuances. The best part of buying ethereum is you don’t need hefty investment to start with.
As a beginner, you may not have complete clarity regarding how to buy ethereum, how much investment to make, etc., and it’s absolutely normal. You will gain clarity as you continue dealing with ethereum frequently. For starting, you can even begin with as little as Rs.100. As there is no maximum cap on the amount you can invest in purchasing ethereum, you can continue scaling as you proceed.
3. Ethereum has High Growth Potential
If there is one cryptocurrency that can shunt bitcoin from the top position, it’s ethereum. While bitcoin is primarily focused on establishing a secure, fast, and affordable peer-to-peer payment system, ethereum plans to go beyond it. Besides handling financial transactions without any assistance from third-party financial institutions, ethereum also allows developers to create decentralized apps via running smart contracts. While the technology is still in its nascent stage, one can expect it to evolve with time, making it a desirable investment option in the long run.
What makes ethereum truly unique in the crypto space is its versatility. People have already started creating dApps (decentralized apps) on ethereum, and more are expected to follow suit. Ethereum can be used to decentralize payments, gaming, social media, and a lot more things. And the higher the potential, the higher is the valuation probability.
4. Ethereum Vs. Ether : Difference You Should Know
Many seem to get confused between ethereum and ether. If you have even the slightest of confusion between the two, this point will put an end to it. Ethereum refers to specific blockchain technology, while ether is the official currency of ethereum. Anyone who wants to use the ethereum platform to create dApps or use the platform for any purpose will have to pay for the service via ether.
You can purchase ether from any exchange platform, and it can also be traded against other cryptocurrencies. To simplify it further, consider ethereum to be a secure database or a decentralized ledger that is accessible to anyone on the internet. It additionally acts as an open-source network that developers can use to create, run, and host decentralized apps on its network. Ether is simply the currency needed to perform any activity on ethereum.
5. Ideal Time, Platform, & Volume to Purchase Ethereum
If you’re buying ethereum for the first time, it’s natural to have too many questions about the investment and ethereum, in general. Beginners should understand that there is no ideal time or volume while purchasing ethereum because of the cryptocurrency’s volatile nature. As the current trends don’t indicate a negative slope for ethereum prices, you may expect it to increase in the coming years.
It can be a good option to invest at the current price, so you don’t regret not purchasing it at a lower price on a future date. To reduce the chances of fraud or errors, always buy from the best ethereum exchange in India. There is no definite rule about the volume, but you shouldn’t invest a lot in the beginning days. As mentioned in the second point, start small and scale big.
Now that you have a basic understanding of ethereum, investing shouldn’t be a problem. However, be cautious and refrain from dealing with ethereum sellers outside decentralized exchanges if you don’t know the seller personally.